ECON 2001.01 Chapter Notes - Chapter 1: Auto-Tune, Marginal Cost, Marginalism

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ECON 2001.01 Full Course Notes
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ECON 2001.01 Full Course Notes
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1. 4 microeconomics and macroeconomics a. b. c. d. What is this class about? a. b. c. d. People make choices - necessary because of scarcity. Scarcity - unlimited wants exceed the limited resources. Economics - the study of choices people make. Economists study economic models - simplified versions of reality used to analyze real- world economic situations. Rational - using all information to achieve goals. Decrease in price of fast food relative to healthful food. Optimal decisions are made at the margin a. b. c. d. Decisions involve doing a little more or a little less of something. Decide by studying marginal cost and benefit (mc and mb) - the additional cost or benefit for some extra action. 1. 2 the economic problem that every society must solve. What goods and services will be produced? a. b. Trade-off - increase in production of one good requires reduction in production of other good results from scarcity.

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