1.1

Economics

The study of the use of resources and decision making

What are the 4 factors of capital?

• Land

• Labor

• Entrepreneurship

• Capital

Physical Capital

• Tools, machines & factories used to produce items

Human Capital

Knowledge experience & training that creates productive workers

Entrepreneurship

A person who brings together all of their resources, capital and takes the risk to start a business

Microeconomics

The study of small scale individuals and firms

Macroeconomics

The collective decisions of everyone all the time, looks at growth, inflation, and policy as well

Mixed economy

Where individuals and the government both play a role

central planned economy

Where government owns the means of production & decides whats produced and how to produce it & who gets it

Market economy

an economic system in which the decisions regarding investment, production, and distribution to the consumers are guided by the price signals created by the forces of supply and demand.

A traditional economy

an economic system where people use customs, traditions, and cultural beliefs to survive, and monetary status is not important

Scarcity

Resources are limited, which creates the need for prioritization and decision-making.

Efficiency

Economics examines how to use these resources in the most effective way to maximize output and satisfaction