ECO 2013 Chapter Notes - Chapter 1~end: Commodity Money, Apple Pay, Commercial Bank
Document Summary
Economics : foundation and models: l . People are rational ex ) apple chooses iphone prices that"s most profitable : people respond to economic incentives . Optimal decisions are made at margin . ( most optimal when marginal revenue = marginal cost. if not, The economic problem that every society must solve . Central planned economy : government makes decisions . Productive efficiency : good or service produced at lowest possible cost. All ocative efficiency : production is accordance with. Economic efficiency : both productive and allocateve achieved . customer preferences . Voluntary exchange : a situation where both buyer and seller are made better off . Equity : equal distribution of economic benefits . * efficiency and equity can"t be achieved at the same time . Economic models positive analysis : analysis concerned with what it is . ( the sun is bigger than the earth . )
