ECO 1104 Lecture Notes - Lecture 2: Business Cycle, Root Mean Square, Invisible Hand
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16 Jan 2017
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Economy: in greek, one who manages a household . It is the management of society"s resources (people, land, buildings, machinery). Scarcity: the limited nature of society"s resources. Economics: the study of how society manages its scarce resources. Economist: person who studies how people make decisions and how people interact with others. Making decisions requires trading-off one goal against another one. Ef ciency: the property of society getting the maximum bene ts from its scarce resources. Equity: the property of distributing economic prosperity fairly among the members of society. Principle #2: the cost of something is what you give up to get it. Opportunity cost: whatever must be given up to obtain some item. When calculating the cost of something you need to take into account the explicit cost and implicit cost. Principle #3: rational people think at the margin. Rational people: people who systematically and purposefully do the best they can to achieve there objectives.
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21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.