ECON 1000 Chapter Notes - Chapter 1: Marginal Utility, Market Economy, Opportunity Cost
2 Feb 2017
School
Department
Course
Professor
Document Summary
Economy: greek word for one who manages a household . Economics: the study of how society manages its scarce resources. 4 principles of individual decision-making: people face tradeoffs. Trade off one goal against another when making decisions. Major tradeoffs in society: clean environment vs. high level of income, efficiency vs. equity. Efficiency: the property of society getting the most it can from its scarce resources. La = quantity of land used to grow apples. Lb = quantity of land used to grow bananas. B = 2 x lb distributing economic prosperity fairly among the members of society. Ch 1: ten principles of economics: the cost of something is what you give up to get it. Compare costs & benefits before making decisions. Opportunity cost: whatever must be given up to obtain some item ie. value of time: rational people think at the margin. > resource cost vs. dollar cost vs. opportunity cost.
