Economics 1 1 Notes Lower Version

• Economics Economics – The study of choices that people make The study of choices that people make

to satisfy their needs and wants.to satisfy their needs and wants.

Microeconomics

Macroeconomics

Choices made by actors such as households,

companies, and individuals.

Choices made by much larger

actors like governments.

Consumers & Producers

To fulfill their need and wants

Goods and Services

Physical objects.

Actions or activities

Tangible Objects- Things

that you can touch and feel

Things you can enjoy but can’t physically touch

Trans

portation

• Factors of production Factors of production are the four are the four types of resources needed to types of resources needed to produce the goods and services that produce the goods and services that people need and want.people need and want.– Natural resources- Natural resources- must be scarcemust be scarce• Items provided by nature- farmland, forests, Items provided by nature- farmland, forests,

mineral mines, oil fields, etc. mineral mines, oil fields, etc.

–Human resources- Human resources- • Human effort exerted during production.Human effort exerted during production.

–Capital resources- Capital resources- • Manufactured goods and money used to Manufactured goods and money used to

produce goods.produce goods.– Factories, department stores, machinery, Factories, department stores, machinery,

and tools.and tools.– Improvements in technology help Improvements in technology help

production.production.

– Entrepreneurship-Entrepreneurship-• The starting of a new business or The starting of a new business or

introducing a new product.introducing a new product.

• Entrepreneur-Entrepreneur- the person involved the person involved and taking the risk.and taking the risk.

• These four things add up to produce These four things add up to produce consumer goodsconsumer goods– The goods and services that people buyThe goods and services that people buy