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)
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