MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so...
-
Upload
sharlene-dawson -
Category
Documents
-
view
215 -
download
0
Transcript of MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so...
![Page 1: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/1.jpg)
MACROECONOMICS
EC105
![Page 2: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/2.jpg)
INTRODUCTION TO ECONOMICS
Every individual endeavors to employ his capital so that its product may be of greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own security, only his own gain. And he is in this led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.
– Adam Smith, Wealth of Nations (1776)
![Page 3: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/3.jpg)
OBJECTIVES
Differences between feudalism, capitalism, & socialism. Know the four main categories of resources. Understand the role of the entrepreneur. Understand the following terms:
EWOT TANSTAAFL Entrepreneurship Free Goods Capital Goods
![Page 4: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/4.jpg)
TANSTAAFL
There Ain’t No Such Thing As A Free Lunch!
![Page 5: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/5.jpg)
TYPES OF ECONOMIC SYSTEMS
FeudalismCapitalismSocialism
![Page 6: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/6.jpg)
FEUDALISM
Part of our original economy. Followed Tradition. Generation to generation. Involved very simple materials, intensive
labor, and little, if any, capital equipment.
![Page 7: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/7.jpg)
CAPITALISM
Evolved from Feudalism. It is considered a relatively new type of
economic system. Based upon Adam Smith’s “Wealth of
Nations” published in 1776.
![Page 8: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/8.jpg)
ADAM SMITH
The First Capitalist Economist. Believed in Division of Labor. Believed in Economic Liberty.
(Individuals know what is best for them.) Called for Free Trade. (internationally)
![Page 9: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/9.jpg)
SOCIALISM
Theory or system of social organization based on government or community ownership of the means of production and distribution of goods
Distribution of wealth! Government becomes monopolistic. Government owns or controls the means of
production:– Factories– Farms– Service Sectors
![Page 10: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/10.jpg)
SOCIALISM (continued)
The first socialist economic system was
THE SOVIET UNION (RUSSIA)1918
![Page 11: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/11.jpg)
TIME LINE IN HISTORY
KARL MARX: the father of socialism. Major works in 1848. The Communist Manifesto & Das Kapital. Co-Authored by Friedrich Engels. Total government involvement.
![Page 12: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/12.jpg)
SOCIALISM vs. CAPITALISM
Socialism is the social system which institutionalizes envy and self-sacrifice: It is the social system which uses compulsion and the organized violence of the State to expropriate wealth from the producer class for its redistribution to the parasitical class.
![Page 13: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/13.jpg)
WHY CAPITALISM?
Despite the intellectuals’ psychotic hatred of capitalism, it is the only moral and just social system.
Capitalism is the only moral system because it requires human beings to deal with one another as traders--that is, as free moral agents trading and selling goods and services on the basis of mutual consent.
![Page 14: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/14.jpg)
CAPITALISM vs. SOCIALISM
SOCIALISM – The government decides how the economic problem will be solved.
CAPITALISM – The individual interacting in the market decides how the economic problem will be solved.
![Page 15: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/15.jpg)
RESOURCES
LANDLABORCAPITALENTREPRENEURSHIP
![Page 16: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/16.jpg)
Land
All natural resources– Raw land– Rivers– Lakes– Forests– Minerals– Climate
![Page 17: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/17.jpg)
LABOR (human resources)
People.Our country’s
most valuable asset.
![Page 18: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/18.jpg)
CAPITAL
NOT JU$T MONEY!– Buildings.– Tools.– Things used in
the production process.
![Page 19: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/19.jpg)
CAPITAL (continued)
Capital can also mean financial capital (money), the dollars to pay for land, labor or tools and buildings.
THIS TOO IS CAPITAL!
![Page 20: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/20.jpg)
ENTREPRENEUR
What does it mean?
Risk taker.Decision maker.Someone who starts or founds an
innovative business.
![Page 21: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/21.jpg)
ENTREPRENEUR (continued)
The people who have the creative genius to develop a new product, the managerial talent to combine raw material, labor, and capital to efficiently manufacturer a product profitability.
Without the entrepreneur, capitalism could not exist.
![Page 22: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/22.jpg)
ECONOMIC WAY OF THINKING
EWOT
– An acronym used as an economic term.
– Know it!
![Page 23: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/23.jpg)
Goals
“Whether you think you can or
whether you think you can’t –
You’re right.”
Henry Ford
![Page 24: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/24.jpg)
GOALS (continued)
Henry Ford was an entrepreneur.
WHY?– Founded and innovative business.– Took risks.– Used capital.– Efficient manufacturer.
![Page 25: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/25.jpg)
GOAL SETTING
4 STEPS
– 1. Choose your goal.– 2. Plan.– 3. Action.– 4. Evaluate.
![Page 26: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/26.jpg)
KEY TERMS
Capital Socialism Entrepreneurship EWOT Free good Resources TANSTAAFL
![Page 27: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/27.jpg)
KEY POINT
A guide to successful living comes through the “Economic Way Of Thinking”!
![Page 28: MACROECONOMICS EC105. INTRODUCTION TO ECONOMICS Every individual endeavors to employ his capital so that its product may be of greatest value. He generally.](https://reader035.fdocuments.net/reader035/viewer/2022081603/56649f385503460f94c54a11/html5/thumbnails/28.jpg)
LECTURE 1 IS OVER ALREADY?