Economics
1/10/08
status quo ex. movie: what's playing, where is it, how much; all leads to do I want to see it?
change in vertical over the change in horizontal degins a slope = rate of change. in the exammple the vertical is price and the horizontal is quantity of tickets.
opportunity cost: the cost of the items given up in exchange for something else.
postivie economics: the economics of facts; what is. an ex is the unemployment rate is 5%
normative economics: the economics of value judgements; what ought to be. an ex is the unemployment rate should be lower
spending potential is made of income, amount of credit accesable, and savings
the four main resources are: land, and anything in it like petroleum; labor, such as a construction worker or a brain surgeon; capitol, such as machinery, equipment, and structures; and finally entreprenueral ability, such as those who start their own business with a plan and the ability to carry it out and are willing to take risks
capitol goods, equipment, structures, key point is that they make more stuff, such as more capitol goods, and consumer goods.
in order for a country to increase their production possibility curve, they must increase their capitol goods, the opportunity cost being a decrease in consumer goods.
fallacy of composition, thinking that if its true for one person or thing, its true for everything.
post-hoc propter hoc, fallacy where on believes if two things follow each other in time, one must follow the other
David Ricardo, 1840's economist who argued that the corn laws had to be repealed.
utility: the satisfaction someone gets from something.
labor force: all those able and willing to work; made up of employed people and unemployed people.