The economics of open data - there is no such thing as a free lunch
THERE IS NO SUCH THING AS A FREE LUNCH
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Transcript of THERE IS NO SUCH THING AS A FREE LUNCH
THERE IS NO SUCH THING AS A FREE LUNCH
ScarcityTHE FUNDAMENTAL PROBLEM FACING
ALL SOCIETIESA condition that arises because society does
not have enough resources to produce all things people would like to have
NOT CAUSED BY SHORTAGE OF MONEY- WHY?
Unlimited wants + Limited resources=SCARCITY
Factors of ProductionProductive resources:
LANDCAPITALLABORENTREPRENEURSHIPS
Produce and distribute goods and services
1. LAND“Gifts of nature”Natural resources
not created by human effort
Fixed- in limited supply (can’t be created by man)
2. CAPITAL
Tools, equipment, and factories in production of goods and services
Capital goods vs. financial capital
3. LABOR
People w/all their efforts, abilities, and skills
Availability can vary due to population, immigration, famine, war, etc.
4. ENTREPRENEURS “Risk takers” in
search of profitsWorkers/innovators
responsible for much change in out economy
Business owners, inventors, investors
3 Basic Questions of Every Economy
Help society decide what needs to be produced
Makes decision about how to use its resources
1. WHAT to produce2. HOW to produce3. For WHOM to
produce
WHAT CHOICES HAVE YOU MADE TODAY?
WHAT DID YOU GIVE UP WHEN MAKING THOSE
CHOICES?
Trade-Offs Alternate choices
when you cannot have everything you want. Ex. Spend $50 the
best possible way 3 options:
1. New Outfit 2. iPOD speakers 3. Full tank of gas
Opportunity CostNot $$, but cost of
the next best alternative use of time, money, or resources when one choice is made over another
*NEXT BEST ALTERNATIVE, not all the possibilities
Opportunity CostEx. Choice was full
tank of gas over new iPOD speakers and new outfit
Time, Money, and Resources all have opportunity cost.Examples of Time
and Resources?
Production Possibilities FrontierModel used by economists
to illustrate opportunity costs
Represents various combos of goods and services an economy can produce when all productive resources are fully employed
Ex. The nation of ALPHA has limited supply of resources and produces 2 kinds of goods: guns (military) and butter (consumer)