Transcript Economics as a Second Language

Economics as a Second
Language
To understand economics, you have to know the
vocabulary
 Economic products
 Goods and services that are useful, scarce and transferable to
others
Goods
 Consumer goods: a good for individual use
 Capital goods: a good used to produce something else
 Service: work performed for someone else
 Consumers: someone who uses goods and services to safisfy
their wants and needs

More concepts
 Value: a worth expressed in dollars and cents


For something to have value, however, it must have utility, or
capacity to be useful
For something to have value, it must be scarce and have utility

Diamonds
Circular Flow of Economic Activity
Circular Flow continued
 Most important thing is economic growth
 The circle must continue to grow

This can be done through productivity: output produced by a
given number of inputs in a period of time
 Division of labor
 Specialization
 Investing in human capital
Economic Interdependence
Pros
Cons