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ECONOMICS

A. Economics Microeconomics Macroeconomics B. Scarcity C. Factors or Production 1.land 2. labor 3. physical capital 4. human capital 5. Entrepreneurship 6. technology. ECONOMICS.

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ECONOMICS

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  1. A. Economics Microeconomics MacroeconomicsB. ScarcityC. Factors or Production 1.land 2. labor 3. physical capital 4. human capital 5. Entrepreneurship 6. technology

  2. ECONOMICS • The study of how individuals and society allocate their scarce resources to satisfy their unlimited wants. • The study of how people make choices.

  3. MICROECONOMICS • The study of decision making undertaken by individuals (or households) and by firms. • Ex:

  4. MACROECONOMICS • The study of the behavior of the economy of the whole. • The study of the government and the decisions they make.

  5. SCARCITY • The limited nature of society’s resources. • People can’t obtain as much of something as they want without making a sacrifice. • Not enough goods /resources to meet people’s needs. • Number one problem of all societies

  6. FACTORS OF PRODUCTION(FOP’s) • Factors of Production determine what the economy can produce.

  7. FOP 1 • Land: natural resources such as timber, water, fish, minerals, and/or the land the corporation sits on.

  8. FOP 2 • Labor: contributions of humans who work, involving both mental and physical activities.

  9. FOP 3 • Physical Capital: Consists of the factories used in production. The tools you need to do your job.

  10. FOP 4 • Human Capital: refers to the training and education of workers. When a worker’s skills increase, human capital has been improved.

  11. FOP 5 • Entrepreneurship; Involves human resources that perform the functions of organizing, managing, and assembling the other FOP’S. The entrepreneur is a risk taker.

  12. FOP 6 • Technology: Society’s understanding of the best ways to produce goods and services.

  13. What would happen in a country that had very limited FOP? • Can you think of some examples? • What about a country with numerous FOP’s?

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