Recap from last week:
Figure of 531 barrels of oil and using 16.5 barrels per year was the figure from 1970, so theoretically the world’s supply of oil was supposed to run out in 2002. That did not happen because buyers of oil, when faced with more expensive oil have found alternatives. Now, based on 2010 data there is three times more barrels of il and we’re using twice as much, which proves that we’ll never run out of oil.
Main Lessons of This Week:
Definition of Economics: It is very dependent on other people. It is based on the idea that man acts purposefully. Economics asks the questions: Why do we act with purpose? Where does this purpsoe come from?
Scarcity: The rarity of commodities. When you have to make sacrifices or pay high costs to obtain something. The more scarce something is, the more valuable it is. It matters more if it is more scarce.
Why do we need economists?
Poverty does not require an explanation, but prosperity does.
Economize!:
-The choice between A and B. When you’re choosing between A and B, you’re comparing both expected benefits and expected costs.
-Non economists assume value is objective, but it is really subjective
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