Basic economics... needs, wants, scarcity, etc.

1. Like scarcity, needs and wants, and junk like that Basic Econ Concepts

2. Needs and Wants

3. Scarcity “Limited quantities of resources to meet unlimited wants.” What’s that mean?

4. Scarcity Your wants are pretty much unlimited. Even if yours personally aren’t, once you add up everybody in the population, the collective wants are unlimited. All resources, goods, and services are limited, however. This means it’s impossible for all the wants to be met.

5. Scarcity Economics, then, tries to solve the problem of scarcity. This doesn’t mean to make unlimited stuff, but figuring how to distribute scarce, limited stuff in the best way to meet wants. It also wants to see how people satisfy needs and wants by the choices they make. Why X and not Y? Why McDonald’s? Why did banks buy mortgage-backed securities? Why TXU and not Gexa? Why Crocs? Seriously… why Crocs?

8. Goods and Services Goods Stuff. Services Things people do for others.

9. Shortage When there isn’t enough stuff. Not enough of a product can be supplied or it won’t be supplied. At least not at current prices. If prices go up, it may become profitable for somebody to provide the good or service and that will eliminate the shortage.

10. Factors of Production Land, Labor, Capital These have specific meanings in economics.

11. Land All natural resources used to produce goods and services.

12. Labor Work people get paid for.

13. Capital Human-made resources used to produce stuff or provide services. Note this is different from land, which is natural resources. Two types: Physical and Human.

14. Physical Capital Non-human assets used by real humans in production. Whoa! Check out that physical capital!!!

15. Physical Capital This includes things like buildings, factories, equipment, computers, paper, copy machines, etc. Typically, this increases productivity since you can do more of X and more time is freed up to pursue Y. Not so much.

16. Human Capital The education, experience, abilities, and knowledge of an employee. These have economic value. Not all labor is equal in value.