Economics Test 1 Notes
Macroeconomics- relationships are complex, Large
Lags- everything takes time in economics. When lags occur we raise issues on what really
causes problems.
Scarcity-exists cause nature does not provide us with the resources to produce enough godds
and services to satisfy out material wants.
Economic Problems-
Unlimited wants
Limited resources
Implications of Scarcity
Can’t have everything we want
Getting more of one thing implies giving up something else
Opportunity Cost- When we make a choice in the face of scarcity, we give up opportunity to do
something else.
Economics is a materialistic science that is concerned with the production and distribution of
goods and services.
Basic Economic Questions..
What goods and services should be produced?
How should they be produces?
For whom should these goods and services be produced?
Countries choose economic systems to address these questions
Alternative Economic Systems
Traditional Economy
oAn economic system that answers the basic economic questions the way they
have always been answered.
oDownside- doesn’t handle change good
oWhat to do after change???
