Detailed and in-depth notes of Chapters 1-4, covering the content for ECON1012/1013 (Microeconomics). These colourful summaries contain all the important information from the prescribed textbook and include various diagrams to aid understanding. NOTE: Please read the disclaimer very carefully and a...
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original textbook for the material on which these summaries are based. All images are taken directly from:
Parkin, M. et al. (2020) Economics: Global and Southern African perspectives. 3rd edn. Cape Town, Western Cape: Pearson South Africa.
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, PART 1 :
CHAPTER 1
SOCIAL SCIENCE THAT STUDIES THE CHOICES THAT INDIVIDUALS BUSINESSES GOVERNMENTS + ENTIRE SOCIETIES MAKE AS THEY COPE
WHAT
, ,
WITH SCARLITY + THE INCENTIVES THAT INFLUENCE +RECONCILE THOSE CHOICES
IS ECONOMICS :
·
STUDY Of CHOICES + THEIR CONSEQUENCES
WE WANT MORE THAN WE CAN GET
·
:: INABILITY TO GET EVERYTHING WE WANT =
SCARCITY
·
INCENTIVES RECONCILE CHOICES
A REWARD THAN ENCOURAGES AN ACTION/ PENALTY THAT DISCOURAGES ONE
·
TWO PARTS MICROECONOMICS :
STUDY Of CHOICES THAT INDIVIDUALS+ BUSINESSES MAKE
MACROECONOMICS :
STUDY OF THE PERFORMANCE Of THE NATIONAL ECONOMY + GLOBAL ECONOMY
TWO BIG ECONOMIC QUESTIONS
·
HOW DO CHOICES END UP PETERMINING WHAT HOW FOR WHOM GOODS + SERVICES
,
ARE PRODUCED
DO CHOICES MADE IN PURSUIT OF SELF-INTEREST ALSO PROMOTE SOCIAL INTEREST
·
WHAT , HOW FOR WHOM
-
GOODS + SERVICES ARE OBJECTS PEOPLE VALUE + PRODUCE TO SATISFY WANTS
-
WHAT PRODUCE VARIES ACROSS COUNTRIES + Us OVER TIME
FACTORS OF PRODUCTION
HOW PRODUCE RESOURCES USED
-
IS DESCRIBED BY TECHNOLOGIES + TO PRODUCE GOODS + SERVICES
RENT > LAND = 'GIfTS Of NATURE' :.. NATURAL RESOURCES
KNOWLEDGE + SKILL OBTAINED
>
WAGES LABOR =
WORK TIME + EFFORT BY PEOPLE : QUALITY DEPENDS ON HUMAN CAPITAL
> ENTREPRENEURSHIP
PROFIT HUMAN RESOURCE THAT ORGANISES LAND, LABOUR CAPITAL
=
+
1
FOR WHOM
-
IS WHO CONSUMES GOODS +
SERVICES PRODUCED :
DEPENDS ON INCOME
INCOME CAN BE EARNED TUROUGH SELLING SERVICES OF FACTORS Of PRODUCTION :
SELF-INTEREST
·
US SOCIAL INTEREST
-
SELF-INTEREST :
BEST CHOICE AVAILABLE TO YOU
-
OUTCOME IS IN SOCIAL INTEREST If BEST FOR SOCIETY AS A WHOLE
-
SOCIAL INTEREST REQUIRES
:
EFFICIENCY DESCRIBES SITUATION THAT CANNOT BE IMPROVED + FAIR
SHARES
-
SOCIAL INTEREST ISSUES:
GLOBALIZATION
2
INFORMATION REVOLUTION
3
CLIMATE CHANGE
4
FINANCIAL INSTABILITY
5
UNEMPLOYMENT
6
WATER POWER+ FOOD SHORTAGES
,
·
ECONOMIC WAY Of THINKING
-
A CHOICE IS A TRADE Off
SCARCITY LEADS TO MAKING CHOICES
·
:: SELECT FROM AVAILABLE ALTERNATIVES
TRADEOFF EXCHANGE GIVE UP GET ANOTHER
·
IS AN : ONE THING TO
MAKING RATIONAL CHOICES
-
BY COMPARING BENEFITS +COSTS : ACHIEVE GREATEST BENEFIT OVER COST
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