EC120 Lecture Notes - Lecture 1: Business Cycle, Invisible Hand, Market Economy
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Economics - one who manages a household the study of how society manages its scarce resources. Society also faces many decisions e. g. ) which household members do what tasks and what they get in return e. g. ) decide which jobs will be done and who will do them. Scarcity - the limited nature of a society"s resources. How the economy works as a whole (p 8-10: people face trade-offs. To make decisions you have to trade one goal against another. Equity society getting the most it can out of its resources benefits of society"s resources are equally distributed: cost of something is what you give up to get it decisions requires compare costs and benefits of other actions. Cost whatever has to be given up to get something else: rational people think at the margin. Marginal changes do things by following a plan and for purpose to achieve the best outcome small incremental adjustments to a plan/action: people respond to incentives.