ECON1010 Lecture Notes - Lecture 1: Microeconomics, Opportunity Cost, Marginal Utility
Document Summary
This means that economics is the science of life". What is microeconomics: how to use what you have (your resources) to get as much as possible of what you want. It"s mostly about how individuals make the most efficient (effective) choices. It"s also about the systematic effects these choices have on other individuals. Microeconomics is not just about the stock market, financial transactions, accounting or how wealthy a country might be now in the future; microeconomics is about choices. Scarcity principle: want exceeds available resources, and there are scarce resources of things we want, therefore rational choices need to be made and marginal analysis is used to make decisions. Economics is using what we have to get as much as possible of what we want tradeoffs. Scarce: something that is gained as a result of making a sacrifice or paying a price (not free). The opportunity cost of the slice of cake: three donuts.