ECO 304K Lecture 2: Chapter 2 Notes

• School: UT-Austin
• Department: Economics
• Course: ECO 304K
• Professor: Hickenbottom Wayne

Document Summary

Chapter 2: the economic problem: scarcity and choice. Production (page 23): turning inputs into output. Inputs (resources, factors of production: page 23): anything good used to produce rather than be consumed. Capital (page 23): things that are themselves produced and that are then used in the production of other goods and services. Outputs (page 23): stuff made from inputs. Opportunity costs (page 24): the best alternative that we give up, or forgo, when we make a choice or decision (goes back to scarcity: the thing you don"t pick) Spending on a pair of shoes means you can"t use that money for something else. 20 minutes spent waiting in line for coffee means that 20 minutes can"t be used for something else. Output could become consumer goods (page 28) or investment (page 28) so additional consumer goods mean less investment. Opportunity cost is not the same everywhere.