Chapter 1 CHOICES: THE BASICS
Chapter 1 CHOICES: THE BASICS
1. 1 INTRODUCTION Intemal Economie Extemal Economies Commerce Economies of scale 感 REsino fence 2
2 1.1 INTRODUCTION
Cook dinner 由由 旺田 Get to choose what Do the laundr TV show to watch ouS 8 Get extra dessert at dinner 3
3 Get to choose what TV show to watch Get extra dessert at dinner Do the laundry Cook dinner Household Household
Society What job will be done and who will do them grow food make clothing design computer software Who will get the output of goods and service Who will eat caviar and who will eat potatoes Who will drive ferrari and who will take bus
4 Society ◼ What job will be done and who will do them ◼ grow food ◼ make clothing ◼ design computer software… ◼ Who will get the output of goods and service ◼ Who will eat caviar and who will eat potatoes; ◼ Who will drive Ferrari and who will take bus
Let s go!
5 Let’s go!
1.2 THREE CONCEPTS SCARCITY CHOICES OPPORTUNITY COST
6 1.2 THREE CONCEPTS ◼ SCARCITY ◼ CHOICES ◼ OPPORTUNITY COST
1.2 1 SCARCITY Definition the limited nature of society's resources 1. we seek to satisfy our many and varied needs and wants 2. but our income is scare 3. so we have to make choices about which needs and wants we will satisfy Model an assumption a constraint a consequence
7 1.2.1 SCARCITY ◼ Definition ◼ the limited nature of society’s resources. 1. we seek to satisfy our many and varied needs and wants 2. but our income is scare 3. so we have to make choices about which needs and wants we will satisfy. ◼ Model an assumption + a constraint = a consequence
NEEDS AND WANTS Needs, need to survive basic food, clothing, shelter Wants: would like to have but not for survive fast food, chic clothing good music collection tickets to rock concert
8 NEEDS AND WANTS ◼ Needs: need to survive ◼ basic food, clothing, shelter ◼ Wants: would like to have but not for survive ◼ fast food, chic clothing, good music collection, tickets to rock concert…
NEEDS Physiological needs to remain alive physically e.g. oXygen, water, basic food, shelter, refuge Social needs to belong to the society g. TV set, radio, telephone
9 NEEDS ◼ Physiological needs ◼ to remain alive physically ◼ e.g. oxygen, water, basic food, shelter, refuge… ◼ Social needs ◼ to belong to the society ◼ e.g. TV set, radio, telephone…
1.2.2 CHOICE Time of students - Income of family guns and butter Efficiency and equity
10 1.2.2 CHOICE ◼ Time of students ◼ Income of family ◼ Guns and butter ◼ Efficiency and equity