Economics and Microeconomic Economic Systems

Summary:

This text provides an overview of economics, covering key concepts, economic problems, factors of production, opportunity cost, and economic systems. It explains the definitions of wants, needs, and demands and introduces the factors of production, including labour, natural resources, capital, and entrepreneurship. The text emphasizes the concept of scarcity and its impact on decision-making. It discusses microeconomics and macroeconomics, as well as the distinction between positive and normative statements in economics. Common logical fallacies and economic systems like traditional, command, and market systems are also explored, along with the role of prices in market economies.

The text delves into the economic questions of what to produce, how to produce, and for whom to produce, and introduces different economic systems: traditional, command, and market systems. It highlights the role of money in determining income distribution and the influence of prices on consumer choices. Lastly, it contrasts free market economies and mixed market economies, outlining the varying degrees of government intervention in economic decision-making.

Excerpt:

Economics and Microeconomic Economic Systems

The Field of Economics and Economic Systems
Monday, August 9, 2021, 3:00 PM

What is Economics?
Economics: The study of how individuals and societies choose to use resources that nature and previous generations have provided.

The Economic Problem of Scarcity

• Wants – These are unlimited human desires for goods and services.
• Needs – These are necessities that are essential for survival. Needs can be calculated, i.e. not unlimited.
• Demands – These are things that you need and want, that you are willing and able to buy, i.e. you have the purchasing power to buy them.
• Factors of Production – These are the means by which goods and services can be produced. These include: – Labor, Natural Resources, Capital and Entrepreneurship

Opportunity Cost
Resources are scarce, i.e. resources used to produce a good or service are not available to produce other goods
i.e. ‘ You cannot have your cake and eat it.’

“There ain’t no such thing as a free lunch.”