ECON 201 Lecture Notes - Marginal Cost, Price Ceiling, Microeconomics
23 Apr 2014
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Document Summary
An individual farmer requires property rights to benefit from a market economy. Market failure: when the market fails to allocate society"s resources efficiently. Biggest trade of faced in society is : guns and butter. Rational person acts when the action produces marginal benefits that exceed marginal cost. According to adam smith, buyers and sellers acting independently and out of self interest can promote general economic well being without even realizing it. In the short run, a decrease in inflation temporarily increases unemployment. Inflation: increases in the general level of prices. Phillips curve: the curve that illustrates this tradeoff between inflation and unemployment. Policymaker: a politician or political leader is an individual who is influencing public policy. Marginal benefit: additional satisfaction or utility a person receives from an additional unit of a good or resources. Economics: the study of how society manages its resources. Efficiency: when society gets the most from its scarce resources.
