ECON 101- Final Exam Guide - Comprehensive Notes for the exam ( 31 pages long!)
Document Summary
A social science that studies the choices people make to attain their goals, given their scarce resources. Microeconomics: the study of how households band business make choices, how they interact in markets, and how the government attempts to influence their choices. Macroeconomics: the study of how the individuals, firms and markets, or the economy function together as a whole. People must make choices and therefore face tradeoffs because resources are scarce: people are rational a. b. Rational firm: focused on maxing profits: the true cost of something includes its opportunity cost. a. True cost of coming to carolina is not only the tuition, but also giving up a yearly salary: optimal "how much" decisions are made at the margin a. "what are the cost and benefits of studying one more hour?: marginal costs and marginal benefits of taking an additional passenger (plane vs. Marginal cost - little money to pay for the fuel and its workers.