ECON 102- Midterm Exam Guide - Comprehensive Notes for the exam ( 52 pages long!)
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ECON 102 Full Course Notes
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Econ 102 lecture 2 notes- the nature of economics. If the benefits are greater than the costs: a certain economic action increases well-being. If the costs are greater than the benefits: do(cid:374)"t do that action. Self-interest and rationality: rationality assumption, people do not intentionally make decisions that leave them worse off, models the behavior of people, not their thoughts. Incentives: a reward or punishment for engaging in a particular activity. Incentives matter and affect decision making: related to self interest, (cid:862)what"s i(cid:374) it fo(cid:396) (cid:373)e? (cid:863, can be positive or negative, positive, money, candy, company awards, negative, tax. Markets, policies, and incentives: there are built-in incentives in the free market, profit is the most powerful incentive, self-interest, pursuit of goods, friendship, charity, guides our behavior. Defining economics: scarcity, not enough of our wants at a zero price, never have enough of everything, the most basic economic concept, a fact of life- will always exist.
