What is economic?
“Resources are scarce and the society has unlimited need and wants”
Basic Components:
- Growth
- Full Employment
- Interest Rate
- Inflation
- Trade
- Exchange Rate
What is scarcity ?
- The resources are insufficient to fulfill or satisfy all human needs.
- Human always need more than their basic needs.
:For example, when the producers want to increases the quantity of butter produced, he need to reduce the quantity of guns produced because of the scarcity. Hence, the point fall at point C.
Factors of Production
Factors of Production
What is opportunity cost?
Opportunity cost means the highest valued option forgone.
Economic System
1. Traditional economic system
-exchange of goods
2. Command economic system
-Only the government can decide what and how much to produce.
3. Market economic system
-All decision made by the market equilibrium stage.
Classical Economist
Modern Economist
1) Gary Becker
2) Robert Lucas
3) John Nash
Reflection- Macroeconomic Chapter1- Introduction to Macroeconomics
From this chapter, i learnt the concept of economics, basic components of macroeconomics, the scarcity of the resources and how we solve this kind of problems through 3 basic economic systems. Scarcity happen when there is resource limit and human unlimited need.