IN CONCLUSION: WEEK OF AUGUST 26th

Recap

Hello Everyone. Congratulations on completing and surviving the second week of class. I hope you're thinking that this course will not only be stimulating for you, but also beneficial and practical.

This week, we followed up with last week's lesson that Economics is essentially woven into the fabric of everything in your lives because it involves decision-making in the face of certain scarce resources.

You learned that certain resources are scarce and it is these resources that enable nations, firms, and individuals (households) to grow and prosper over time. The basis of economics is trying to understand how to best use (allocate) these resources.

You got a glimpse of this allocation through the use of the Production Possibilities Frontier (PPF). In it, we show how and when an economy is utilizing its resources efficiently, inefficiently and when it tries to exceed that capability. More importantly, we saw how opportunity costs increase incrementally (at the margin) due to the fact that resources are all very different and are suitable to only certain tasks that make them more efficient and able to drive opportunity costs down. We stressed the importance of opportunity costs by examining trade and how comparative advantage is the basis for that trade.

Looking Ahead

Next week, we move away from the basics and fundamentals of economics. We will start to delve into our study of markets, by examining the tools of economics, namely supply and demand. Don't forget that you have your first quiz due tonight.