ECO 111- Final Exam Guide - Comprehensive Notes for the exam ( 114 pages long!)
1 Dec 2017
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Document Summary
Economics is the study of human behavior (decision making). Origins of economics date back to adam smith: wealth of nations. Free exchange and competitive markets would harness self-interest as a creative force. Individuals will be guided by the invisible hand. Economics is about scarcity and the choices we have to make due to that scarcity. Scarcity prevents us from being able to completely ful ll our desires: scarcity doesn"t mean that there is necessarily a shortage, it means that the scarce good is not freely available to ful ll everyone"s wants. Choice is the act of selecting among alternatives. Resources- inputs that people use to produce goods and services. An objective concept that describes a factual situation where limited resources inhibit us from ful lling all of our wants. An objective concept that refers to a personal opinion of whether someone meets an arbitrarily de ned level of income.
