Chapter 1 Section 2 Basic Economic Concepts Goods
Chapter 1, Section 2 Basic Economic Concepts
Goods, Services, and Consumers Goods: item that is economically useful, or satisfies an econ want
Types of goods Consumer good- intended for individuals Capital good- manufac. goods that are used to prod other goods and services Ex: oven, computer, robot
Services Work performed for someone
consumer A person who uses goods and services to satisfy wants and needs We indulge in consumption
Value, Utility, and Wealth Value: can be expressed in dollars and cents Paradox of value: a situation where some necess, such as water, have little money value. Non-necess, such as diamonds, have a much higher value scarcity itself is not enough to create value
Utility For something to have value, must also have utility- useful and provide satisfac May vary fr one person to another Therefore: value=scarcity+utility Example: diamonds, oil, fine wine
Wealth Accumulation of those products that are tangible, scarce, useful, and transferable from one person to another. Nation’s wealth is all of the above Includes goods but not services What Adam Smith thought
Productivity and Economic Growth Productivity: a measure of the amount of output produced by a given amount of inputs in a specific period of time Division of labor and specialization Investing in human capital (pg. 16)- the sum of the skills, abilities, motivation, and health of the ppl
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