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INCOME: Revenue earned or received by households that can be used for consumption or saving. For the aggregate economy, earned income is termed national income, while received income is termed personal income. The key is that income for the aggregate economy is generated in the production of goods and services.
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Lesson 1: Economic Basics | Unit 1: Economics
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An understanding of economics also involves:Scarcity. We have limited resources, but unlimited wants and needs. The study of economics is essentially the study of scarcity.Opportunity Cost. Using resources for one alternative prevents using them for another. Opportunity cost is the highest valued alternative.Analysis. Economics is an analytical discipline that answers 'What if...?' questions.
Scarcity dictates that we must answer the three basic questions of allocation are:- What? What goods and services will be produced with society's resources?
- How? How will society's resources be used to produce the goods and services?
- For whom? Who receives the goods and services produced with society's resources?
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PRINCIPAL-AGENT PROBLEM A disconnection or conflict between the objectives and goals of the principal and those of the agent authorized to represent the principal. The principal-agent problem arises because an agent is given the responsibility and authority to take actions that affect both the principal, but can also affect the agent. This problem is common in corporate management, where the principal is shareholders and the agent is managers. It is also common in government, where the principal is the public and the agent is elected leaders.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either a wall poster commemorating next Thursday or a pair of gray heavy duty boot socks. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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This isn't me! What am I?
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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WE
Walrasian Equilibrium
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