ECON1010 Lecture Notes - Lecture 1: Marginal Utility, Marginal Cost, Opportunity Cost
Document Summary
Market: the market for a given good/service is the set of all the consumers and suppliers who are willing to buy and sell that good/service at a given price. Characteristics: consumers and suppliers are price takers, homogenous goods, no externality, goods are excludable and rival, full information, free entry and exit. Marginal benefit: the marginal benefit of producing a certain unit of a good is the extra benefit accrued by producing the unit. Cost-benefit principle: states that an action should be taken if the marginal benefit is greater than the marginal cost. Economic surplus: the economics surplus of a certain action is the difference between the marginal benefit and the marginal cost of taking that action. Quantity supplied: the quantity supplied by a supplier represents the quantity of a given good/service that maximises the profit of the supplier. Supply curve: represents the relationship between the price of a good/service and the quantity supplied of that good/service.
