ECON101 Lecture Notes - Lecture 1: Market System, Planned Economy, Kumasi

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Wokia Kumase

Document Summary

Makes the class average 75% at the end. First midterm will cover diferent materials than the second midterm, must write at least 1. Write the econ exam for the correct secion. Economics is the study of how we allocate scarce resources (factors of producion) Assume that people are raional and make raional decisions. When prices rise, incenive to sell rises and incenive to buy decreases; when prices decrease, incenive to buy rises and incenive to sell decreases. Equilibrium price = when demand and price curve meet. Planned economy = no incenive to grow b/c everybody receives the same rewards at the end of the day. Market system = incenive to grow, over and under producion -> wastage of resources, can"t get everything we need because someimes we can"t pay for it.