ECON 1P91 Study Guide - Midterm Guide: Normal Good, Scientific Method, Complementary Good

• School: Brock University
• Department: Economics
• Course: ECON 1P91
• Professor: Marilyn Cottrell

Document Summary

The 5 foundations of economics: incentives. Factors that motivate you to act or exert effort. Positive and negative: these encourage action. Making a decision knowing that you are giving up something else. Me grinding out right now is trading off sleep for studying: opportunity cost. Is the highest valued alternative that must be sacrificed in order to get something else. Make the decision based on what gives you the largest benefit. I could be sleeping now but studying is giving me a greater benefit which is doing good on the final. If something has less value to you and you give it up it will have a lower opportunity cost. Lower opportunity cost = comparative advantage: marginal thinking. Economic thinking: requires a purposeful evaluation of available opportunities to make the best possible decision. Marginal analysis: to break down decision into smaller parts.