ECON1002 Lecture Notes - Lecture 1: Consumer Choice, Opportunity Cost, Microeconomics
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What is economics: the study of the efficient allocation of scarce resources, a behavioural/decision science founded on rational choice theory, the study of exchange relations. List three themes it includes: the study of individual firms, consumers, and markets. Themes include consumer theory, theory of the firm, competition, game theory, elasticity, partial equilibrium, market failures, market distortions. The study of the aggregate economy and all things pertaining to money themes include money, exchange rates, interest rates, inflation, fiscal policy. You have an hour to spare in which you can do any of the three following activities, which each take an hour. Rank your preference from 1 3: readabook b. playagame c. watch a movie. So if your ranking is 1: a, 2: b, 3: c, then the opportunity cost of a is b. We assume that you second preference has a higher value than your third preference because you prefer it.
