Topic 1 Basic Economic Ideas
1.What is Economics?
Economics – studies the allocation of scarce (scarce = limited) resources in respon to unlimited wants.
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2.What is scarcity?
●ceo全称Limited resources:
资源的有限性
In economic we categories the resources available to us into four types. There are known as factors of production:
1). Land: natural resources in their natural states. Examples: minerals, oil, water, forests.
2) Labor – the human capacity to work.
3) Capital东莞美容学校 – anything that is produced in order to increa productivity in the future; includes human capital and physical capital.
In economics, capital does NOT include financial capital, such as money, stocks, and bonds
Examples: Machines, vehicles, buildings (factories, warehous, offices, etc.), skills.
Physical capital（物质资本） – includes buildings, machinery, and equipment.
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Human capital （人力资本）– acquired skills and abilities embodied within a person.
4) Entrepreneurship – personal initiative to combine resources in productive ways. Involves risk.
●Unlimited wants：
欲望的无限性
Scarcity: Wants are unlimited but resources are scarce.
相对于人类需要的无限性而言，任何资源和商品都是稀缺的
3.How scarcity implies choice？
●Scarcity means we must choo. （becau of scarcity, we need to decide how to u limited resources） When you u a resource for one good, you can’t u that resource for something el.
Example: the building we are in is being ud as a school. Therefore, we do not get to u it as a hotel, business office, or anything el that we want. We must choo one thing.
4. Opportunity cost: The benefit lost from the next best alternative
The relationship between scarcity, choice and opportunity cost.
5. The three basic economic problems
a.what to produce？
b.How to produce？
c.For whom to produce?
The three basic economic problems can be answered differently in different economic systems:
a: command economic system:
1)Planners have to decide what is to be produced.
2)Planners then have to decide to how it is to be made.
3)Finally planners have to make decisions about distribution-which consumers will receive what goods and rvices.
The key features of a command economy are that central government and its constituent organizations take responsibility for:
●The allocation of resources
●The determination of production targets for all ctors of the economy
●The distribution of income and the determination of wages
●The ownership of most productive resources and property
●Planning the long-term growth of thebestbuy economy.
An evaluation of command economies
Disadvantage:
1 In a planned economy, individuals have relatively little Choice
2 In a planned economy, it is difficult to provide sufficient incentives for enterpris and individual workers to produce good quality products.
introduction是什么意思
3Queuing is endemic in many planned economies.
4Environment is even wor than market econo
Advantage:heatek
1)Planners t high priorities on providing all citizens with a minimum standard of living. But equally, there is considerable evidence to suggest that tho in power ud the planning system to their own advantage.
2)Karl Marx dreamt of creating a society in which each would receive according to their need. Communist planned economies, to some extent, achieved this reduction in risk for t
he individual. However, it can be argued that removing risk also removes incentives to work and create wealth.
Command economies can only work if there is a centralized bureaucracy devising and implementing plans. They leave little room for individual freedom. Whether a pure command economy could operate within a political democracy is debatable.
b. market economic system
●What is to be produced?
In a pure free market, it is the consumer which determines the allocation of resources.
淘宝培训学校●How is it to be produced?
Producers are in competition with each other. producers must produce at lowest cost if they are to survive in the market place. This then determines how goods are produced.
●For whom?
This is determined by ownership of the factors of production.
An evaluation of free market economy
Advantage神父英文:
1)one of the principal advantages claimed for market forces is that they promote efficiency.
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2)the profit motive provides an incentive for entrepreneurs to produce high-quality products and to innovate. Similarly, the possibility of high wages encourages workers to train, work hard and take on extra responsibility.
