ECO 1002 Lecture Notes - Lecture 1: Opportunity Cost
28 Sep 2016
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Incentive: reward that encourages action or penalty that discourages one. Economics: social science that studies the choices that in, businesses, governments, and entire societies make as the cope with scarcity and the incentives that influence and reconcile those choices. Land: what we use to produce goods and services: people who sell land can earns rent. Labor: the work time and effort that people devote to producing goods and services: people who sell work can give wages. Capital: the tools, instruments, machines, buildings and other constructions that business use to produce goods and services: earns interest. Entrepreneurship: the human resource that organizes labor, land, and capital: earns profit. An exchange, giving up one thing to get something else. People make rational choices by comparing benefits and costs. In order to gain the greatest benefit over cost for the person making the choice. Opportunity cost is what you must give up to get something.
