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Classicists markets works best when they are left alone anf that there
is nothing the smallest role for government; Laissez Faire.
SCARCITY
a situation where there is unlimited wants but limited resources.
Shortage when producers will or will not offer goods and services.
Hoarding keeping of the food supply by business men [Group: Cartel]
1. What to produce?
2. How to produce?
3. How much to produce?
4. For whom are the goods to be produced?
2 TYPES OF CHOICES
-Education
-Income
-Age
-Taste and Preferences
-Profession
ERG MODEL
[By: Clayton Alderfer]
Communism- The state controlled and owned all the industries and
resources of the country All people are equal
Socialism- Combination of capitalism and communism
Fascism- Resources and industries are controlled by the state under a
dictator The people are for the state, not the state are for the
people
CONSUMPTION
CHARACTERISTICS
[Key: ABRNALA]
-Alert
-Budget Conscious
-Reasonable
-Not affected by advertisement
-Analytical
-Looking for alternative
-Avoid panic buying
RIGHTS
GOVERNMENT AGENCIES
PRODUCTION
-Process of using resources to produce goods and services.
FACTORS
PRODUCTION FUNCTION
Rent- Payment of use of land
Wages Amount of money received by workers
Interest Payment after deducting all expenses in the operation
METHODS OF PRODUCTION
PRODUCTION COST
-Fixed Cost
-Variable Cost
-Total Cost
TFC+TVC=TC TVC/TP=AVC
TC-TVC=TFC TC/TP=ATC
TFC/TP=AFC TC-TFC=TVC
STANDARD OF LIVING
LAWS OF CONSUMPTION