Economics, Scarcity, and Choice :: Economics

political economy, Scarcity, and ChoiceEconomics is the study of choice under conditions of scarcity Scarcity a smirch in which the amount of something available is insufficient to satisfy the desire for it.- metre and purchasing power are scarce As individuals, we side of meat a scarcity of time and spending power. Given more of either, we could energise more of the goods and run that we desire.Resources the land, labor, and heavy(p) that are used to produce goods and function- scarce labor the time human beings spend producing goods and services cr experiencework keen-sighted lasting tools used in producing goods and services physical capital buildings, machinery, equipment human capital skills and training workers possess land the physical office on which production occurs, and the natural resources that come with it As a society, our resources, land, labor, and capital, are insufficient to produce all the goods and services we might desire. In oppos ite words, society faces a scarcity of resources. Raw material not long lasting tool Ex. ChalkWhat to produce?How very much to produce?How to produce it?The World of EconomicsMicro economics the study of the behavior of individual households, firms, and governments the Choices they make and their fundamental interaction in specific markets What happens to the cost of movie tickets over the next fin years? How many jobs will open up in the fast-food application?Macroeconomics the study of the economy as a whole Lumps all goods and services together and looks at the economys total output.Positive economics the study of what is, of how the economy works (deals with the facts)Ex. If we lower income tax rates in the U.S. next year, will the economy grow faster? If so, by how much? What effect will it have on total employment?prescriptive economics the study of what should be it is used to make value judgments, bring up Problems, and prescribe solutions. Normative analysis is based on positive analysis. wherefore Study Economics1. To understand the world better- understand globular and cataclysmic events such as wars, famines, epidemics- understand local problems ex. Worsening trading conditions in the city- tell us how many skilled therapists, ministers are available to help us2. To strike self-confidence- when you master economics, you gain a sense of mastery over the world, and thus over your own life3. To achieve social change- make the world a better place