1. Basic Economic Concepts
Chapter 1, Section 2
Basic Economic Concepts

2. Goods, Services, and Consumers
Goods: item that is economically useful, or satisfies an econ want

3. 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

4. Services
Work performed for someone

5. consumer
A person who uses goods and services to satisfy wants and needs
We indulge in consumption

6. 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

7. 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

8. 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

9. 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