EC120 Chapter Notes - Chapter 1: Marginal Utility, Consumer Confidence, Money Supply
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EC120 Full Course Notes
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Document Summary
That economics is about the allocation of scarce resources. How to use marginal reasoning when making decisions. Why trade among people or nations can be good for everyone. Why markets are a good, but not perfect, way to allocate resources. What determines some trends in the overall economy. Scarcity: limited resources to satisfy unlimited wants. Macroeconomics protecting the environment, and other needs: economics explains the choice we make, choice may change in future (when dealing with scarcity, explains current choices and choices that may occur. How people make decisions: principle #1: people face trade-offs. Society faces an important trade-off: efficiency vs. equity. Efficiency: when society gets the most from its scarce resources. Equity: (cid:449)he(cid:374) prosperity is distri(cid:271)uted u(cid:374)ifor(cid:373)ly a(cid:373)o(cid:374)g so(cid:272)iety(cid:859)s (cid:373)e(cid:373)(cid:271)ers: principle #2: the cost of something is what you give up to get it. Making decisions requires comparing the costs and benefits of alternative choices.
