ECON-E 201 Lecture Notes - Lecture 10: Demand Curve, Marginal Utility, Comparative Advantage
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ECON-E 201 Full Course Notes
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Who gets the goods and services depends on the incomes that people earn. Four categories: land earns rent, labor earns wages, capital earns interest, entrepreneurship earns profit. The assumption that people do not intentionally make decisions that would leave them worse off. Economists assume that people make choices in their own self-interest and in a rational manner. Choices that are best for society as a whole are said to be in the social interest. Is it possible that when each one of us makes choices that are in our self-interest, it also turns out that these choices are also in the social interest: ex/ education. The economic way of thinking places and its implication, choice, at center stage. You can think about every choice as a tradeoff and exchange giving up one thing to get something else. Scarcity occurs when the ingredients (resources) for producing things that people desire are insufficient to satisfy all wants.
