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Lecture Economics of social issues - Chapter 1: Alleviating human misery: The role of economic reasoning

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Abject poverty is without question the major economic problem of the world. This has always been so, but it has become the focus of great concern for nations and for large numbers of persons in recent years. To understand its causes and achieve its possible alleviation, an understanding of the nature of economics and economic activity is necessary. | Chapter 1 Alleviating Human Misery: The Role of Economic Reasoning Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Goods & Services Food, Clothing, Shelter, Transportation Health Care, Education Truth, Justice, and the American Way 1- In order to survive, prosper and feel good about ourselves, we need to consume goods & services. There are the obvious goods and services, like food, clothing, shelter, and transportation; the less obvious goods & services like health care and education, and the not at all obvious goods & services like truth, justice, and the American Way. Click 1: Food, Clothing, Shelter, transportation followed by graphics Click 2: Health care, education followed by graphics Click 3: Truth, Justice and the American Way followed by graphic Resources Labor Capital Technology 1- Unfortunately, goods & services do not rain down out of the sky. They must be produced using resources or factors of production. Click 1 : Labor followed by labor graphic Click 2: Capital followed by computer and farmland graphic Click 3: Technology Scarcity Scarcity Economic Problem Our Insatiable Wants Our Limited Means 1- The leads to a big problem Click 1 : Our insatiable wants Click 2 : Our limited means Click 3: Arrow from Our insatiable wants meets arrow from Our limited means resulting in explosion Click 4: Down arrow to Scarcity Click 5: Down arrow to Economic Problem Economic Problem – how can we use our scarce resources to provide the greatest happiness to society? Economics – the study of how society manages its scarce resources The Capacity of the Economy to Produce Gross Domestic Product total market value of all final goods and services produced within an economy during a specific time period 1- Click 1: Gross Domestic Product Click 2: the definition Production Possibilities Food Education 0 100 40 86 50 80 60 72 90 40 100 0 20 20 40 40 50 60 90 80 86 100 Education (millions of student . | Chapter 1 Alleviating Human Misery: The Role of Economic Reasoning Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Goods & Services Food, Clothing, Shelter, Transportation Health Care, Education Truth, Justice, and the American Way 1- In order to survive, prosper and feel good about ourselves, we need to consume goods & services. There are the obvious goods and services, like food, clothing, shelter, and transportation; the less obvious goods & services like health care and education, and the not at all obvious goods & services like truth, justice, and the American Way. Click 1: Food, Clothing, Shelter, transportation followed by graphics Click 2: Health care, education followed by graphics Click 3: Truth, Justice and the American Way followed by graphic Resources Labor Capital Technology 1- Unfortunately, goods & services do not rain down out of the sky. They must be produced using resources or factors of production. Click 1

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