COMM 101 Chapter Notes - Chapter 2: Monopolistic Competition, Market Economy, Perfect Competition
Document Summary
Economics - the study of how a society uses its scarce resources to produce and distribute goods and services, it"s the study of how choices (what people, companies, or nations choose from the available resources) Microeconomics - the sub-area of economics that focuses on individual parts of the economy, such as households or businesses. Macroeconomics - the sub-area of economics that focuses on the economy as a whole by looking at aggregate data (data for large groups of people, companies, or products) The five factors of production - natural resources, labour, capital, entrepreneurship, knowledge. Households provide for businesses (labour, natural resources, etc. ) which converts those inputs into outputs for the consumer. Customers receive income from rent, wages, and ownership profits. Businesses receive income from consumer purchases of goods and services. Governments supply public goods and services (school, police, etc. ) that benefit both businesses and individuals. Government purchases from businesses also contribute to business profits.
