ECON 101 Lecture Notes - Lecture 1: Opportunity Cost
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ECON 101 Full Course Notes
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Key terms: microeconomics, macroeconomics, positive economics, normative economics, Economics - a social science that deals with the study of human decision making given a set of constraints. How we decide to allocate our resources given limited land/labor/capital. Could also be set of legal restrictions, limited income, etc. Formal definition: study of the allocation of scarce resources over competing and alternative uses. More wants than availability rationing must occur. Example: you pay for a new tv. Opportunity cost is giving up the chance to spend on something else. Fields: labor, health, public finance, environment, industrial. Macroeconomics - focuses on the aggregate, overall economy. Gdp, inflation, unemployment, economic growth, interest rates, fiscal and monetary policy, etc. Positive economics - branch of economic analysis that describes the way the economy actually works. Objective analysis - facts, what is, testable hypotheses. The price of gas is higher today than 20 years ago in real terms.