ECON 200 Lecture Notes - Lecture 1: Amusement Park, Sunk Costs, Marginal Cost
Document Summary
Economics study of how people manage resources. Resources can be physical or intangible: gold, cash vs. time, job experience, etc. Microeconomics how individuals and firms manage resources. Macroeconomics study of the economy as a whole, how policymakers manage growth and behavior of overall economy. Scarcity the condition of wanting more than we can get with available resources. Opportunity cost the value of what you have to give up in order to get something, the true cost of your choice. Marginal decision-making rational people compare the additional benefits of a choice against the additional costs, without considering related benefits and costs of past choices. Efficiency use of resources to ensure that people get what they most want and need given the available resources. Positive statement claim about how the world actually works. Normative statement claim about how the world should work. Economists tend to approach problems by asking 4 questions. Scarcity correlates to the q1: wants and constraints of those involved.