Jacob Economics - Week 1

In the first episode, we learn the basics of what economics is. Economics is the study of people and choices. We also learn about what opportunity cost is. Opportunity cost is the act of giving up one thing to have another thing. One example of this is giving up love to have money, and vice versa. Lastly, we learn about the difference between macroeconomics and microeconomics. Macroeconomics is the study of the entire market, whereas microeconomics is the study of specific smaller markets.

In the second episode, we learn about specializations/divisions of labor. Specialization happens when different people each only have one job that they do, but they do it well. Perhaps one of the most famous examples of the use of specialization is Henry Ford's assembly line. Ford split up the work into many different steps, for example some people would get the steel, where it is handed off to others who make the car parts, then another would assemble them. The process would continue down the line until you had a fully operational vehicle made by many different people.

We also learned about the Productions Possibilities Frontier (PPF) graph. The PPF shows the different combinations of two goods being produced using all resources efficiently. Any possible combination inside the curve is inefficient, on the curve is efficient, and outside the curve is impossible.