ECO 304K Lecture Notes - Lecture 1: Ceteris Paribus, Opportunity Cost

• School: UT-Austin
• Department: Economics
• Course: ECO 304K
• Professor: Hickenbottom Wayne

Document Summary

Economics: the study of how individuals and societies chose to use the scarce resources that nature and previous generations have provided. Scarce: total quantity of a good is less than people would chose if the good was free. Model: a formal statement of a theory on how and why variables are related to each other. How we think, prediction on how it will interact with each other. Variable: a measurable thing a model talks about. Ockham"s razor: the principle that irrelevant detail should be cut away. Leaving out variables that exist, but are not a part of analysis. Ceteris paribus: (all else equal) common model assumption that some variables that might matter aren"t changing value. Important since graphs restrict us to looking at only 2 variables at each time. Inputs or resources or factors of production: anything good used to produce rather than be consumed.