Lesson 1 (BMIECE).docx

**LESSON 1: INTRODUCTION TO MICRO ECONOMICS** \- the study of small group of individuals such as households, firms, investors, industries, etc. **SCOPE OF MICROECONOMICS** - - - **FREE GOODS AND ECONOMIC GOODS** - - **PRICE AND VALUE** - - **CLASSIFICATION OF WANTS** - - -...

**LESSON 1: INTRODUCTION TO MICRO ECONOMICS** \- the study of small group of individuals such as households, firms, investors, industries, etc. **SCOPE OF MICROECONOMICS** - - - **FREE GOODS AND ECONOMIC GOODS** - - **PRICE AND VALUE** - - **CLASSIFICATION OF WANTS** - - - **PRODUCTION POSSIBILITY CURVE** \- this is somewhat related to OC \- OC is you need to give up the other option in order to have the other option while in PPC, how much will you give up in order to have the other \- it illustrates three concepts: Scarcity, choice and opportunity cost **FIXED RESOURCES AND VARIABLE** - - **ECONOMIC SYSTEM** \- a system of production, resource allocation and distribution od goods and services within a society **FREE MARKET ECONOMY** \- buyer and seller are solely responsible for their choices to make \- price is based on supply and demand \- no government intervention \- capitalist economy **PLANNED ECONOMY** \- Central economy has to make decision \- no private property \- socialist economy **MIXED ECONOMY** \- combination of capitalism and socialism \- contains both private and public property