Economics 1021A/B Lecture Notes - Lecture 5: Marginal Utility, Cappuccino, Espresso

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Nicholas Kahnert

Document Summary

All economic questions arise because we want more than we can get. Our inability to satisfy all out wants is called scarcity; we must make choices. Incentive a reward that encourages an action or a penalty that discourages one. Economics the social science that studies choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. Microeconomics the study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments. Macroeconomics the study of the performance of the national economy and the global economy. What: what we produce varies across countries and changes over time. Goods & services the objects that people value and produce to satisfy wants. How: how we produce is described by the technologies and resources that we use. For whom: who consumes the goods and services that are produced depends on the incomes that people earn.