Lecture 1
Lecture 1
Lecture 1
Lecture 1
Lecture 1

100

Why do we have to make so many choices?
Scarcity of Resources

100

Why is efficiency so important?
Scarcity of resources

100

What determines how fast output should go up?
Growth rates of labor force and labor productivity

100

What are the factors of production?
Land, labor and Capital

100

What was the tribal economy good at? Bad at?
Good - Equity Bad - Efficiency

200

What do all actions have associated with them?
Opportunity Costs

200

Why is creating jobs not a goal for producers?
The goal is to produce using the fewest resources possible (including workers)

200

How do profits and losses help allocate resources?
They signal who should get scarce resources and who should not

200

How does technological change fight off scarcity?
It increases efficiency

200

What did ancient Rome or Feudal Europe do better? Worse?
Better - Efficiency Worse - Equity

300

Why do incentives matter?
They impact all of our decisions

300

Why is competition so valuable to society?
It promotes efficiency

300

What do we need economics laws and models for?
To help make good choices

300

How can there be more oil today than in the past?
Technological changes

300

What is market capitalism good at? Bad at?
Good - Efficiency Bad - Equity

400

Is a free ticket to a movie free? Why?
No, because of opportunity costs

400

Why are voluntary exchanges good for society?
It promotes division of labor and higher efficiency

400

How do you know if anything is scarce?
If the price is greater than zero

400

What three big questions must an economic system answer?
What is produced, how and who gets it

400

Planned totalitarian systems promise _______ but are actually best at _______.
Equity, Security

500

Why do people earn income?
To produce things of value

500

For living standards to go up, what must happen?
Output, more stuff must be produced

500

What is not scarce?
Bads

500

What are the three standards for rating an economic system?
efficiency, equity and security (stability)

500

How do democratic socialist systems perform?
Well on all three! (efficiency, equity and security)