7 Questions
What is the origin of the word 'economy'?
The word economy comes from the Greek word oikonomos.
Explain the commonality between households and economies.
Both households and economies face endless decisions in allocating resources among alternative uses.
What kind of decisions do households and societies have to make?
Households and societies have to decide on tasks, resource allocation, and distribution of goods and services.
Why must a society allocate people to various jobs?
A society needs people to perform tasks like growing food, making clothing, and designing software.
What is one of the key decisions a society must make after allocating resources to various jobs?
A society must decide on the distribution of goods and services produced.
What are some examples of goods and services that a society must distribute?
Examples include deciding who will eat potatoes or caviar, and who will live in a grand manor or a fifth-floor walk-up.
Why do economies and households need to allocate resources among alternative uses?
To ensure efficient use of resources and address the needs of individuals within the economy or household.
Study Notes
Origin of the Word Economy
- The word economy comes from the Greek word "oikonomos", meaning "one who manages a household".
Household Decision Making
- Members of a household face endless decisions on task allocation and resource distribution.
- Decisions include who performs tasks, such as cooking dinner, cleaning the bathroom, and driving the car.
- Resources, including time, dessert, and car mileage, must be allocated among alternative uses.
Societal Decision Making
- A society faces countless decisions on job allocation and resource distribution.
- Decisions include what jobs will be done, who will do them, and how to distribute goods and services.
- Resources, including people, land, buildings, and machines, must be allocated to various jobs.
- Society must decide who will receive which goods and services, such as food, clothing, and housing.
Explore the connection between households and economies, and discover how decision-making processes within a household relate to broader economic principles. Learn about the origin of the word 'economy' and its ties to managing a household.
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