ECON 103 Lecture Notes - Lecture 1: Economic Freedom, Ipod, Creative Destruction
16 Apr 2015
School
Department
Course
Professor
Document Summary
Examples: producing illegal substances, drinking and driving, pollution. Positive aspects of a command economy: equity = more equal distribution of resources, stability = stable markets and jobs because of less creative destruction (changes caused by innovation). But government control means less incentive for innovation or minimizing costs. To explain how an economy works we must first analyze how individuals make the decisions that shape our economy. Principles of individual choice: resources are scarce. Resource = anything that can be used to produce something else: land, labour, capital, human capital, time. Scarcity = resources are scarce when there isn"t enough to satisfy everyone if it were free. Economics is the study of the allocation of scarce resources. 3: what to buy, how much to buy, go to school or get a job, what to produce and sell, the real cost of something is what you must give up to get it.
