1. BB 32
UNIT 1
ECONOMIC PROBLEMS& GOALS,
CONCEPT OF SCARCITY & CHOICE
BB 32
MICRO ECONOMICS

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3. NEED
WANT DESIRE
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4. WANT DESIRE
MONEY
POWER
DEMAND
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5. Scarcity
“Limited quantities of resources to meet unlimited
wants.”
Your wants are pretty much unlimited.
All resources, goods, and services are limited,All resources, goods, and services are limited,
however.
This means it’s impossible for all the wants to be
met.
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6. Opportunity cost
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7. Scarcity and choice
Scarcity and choice and opportunity cost
Scarcity and choice for firm
Scarcity and choice for societyScarcity and choice for society
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8. Economic problems
Economics, then, tries to solve the problem of
scarcity.
How to determine and what to produce
Socialism - societySocialism - society
Communism – centrally
Capitalist- laissez faire
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10. Land, Labor, Capital and enterpriseLand, Labor, Capital and enterprise
These have specific meanings in economics.
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11. Land
All natural resources used to produce goods and
services.
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12. Labor
Work people get paid for.
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13. Capital
Human-made resources used to produce stuff or
provide services.
This includes things like buildings, factories,
equipment, computers, paper, copy machines, etc.equipment, computers, paper, copy machines, etc.
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14. Enterprise
Makes sure all the 3 factors of production are co-
operating and organsied
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15. Economic goals
Full employment of factors of production
Price stability
Inflation
Economic growthEconomic growth
Free trade with nations
“correct ” distribution of income
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16. Efficiency- production efficiency
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17. Specialization
Three coordination tasks
with markets and prices
How to produceHow to produce
What to produce
For whom to produce
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