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Chapter 1 Macro Material Type: Notes; Professor: Weinstock; Class: Principles of Economics: Macroeconomics; Subject: Economics; University: Pace University-New York; Term: Fall 2015;
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Introduction : What is economics? Resources- Human made-capital Services vs. goods (Highest paid knowledge jobs) GDP- measure how big economy is Inflation-price/goods going up Disinflation- when goes under 0% Deflation- prices/goods going down ECONOMICS - is the science of choice, exploring the choices made by individuals and organizations Scarcity- the resources we used to produce goods and services are limited Economics- the study of choices when there is scarcity Factors of production- resources used too produce goods & service; also known as production inputs or resources. Natural resources- resources provided by nature and used to produce goods and services. Labor- human effort, including both physical & mental effort people, used to produce goods and services. Physical capital- the stock of equipment machines, structures, and infrastructure that is used to produce goods and services Human capital- the knowledge and skills acquired by a worker through education and experience and used to produce goods and services.
Entrepreneurship- the effort used to coordinate the factors of production-natural resources, labor, physical capital, and human capital- to produce & sell products. Positive vs. Normative Analysis Positive analysis- “what is?” or “what will be?" Normative analysis- “what ought to be?" 3 economic questions What? How? Who? The choices made by individuals, firms, and government answer 3 questions