ECON 1110 Lecture Notes - Opportunity Cost, Capital Good, Economic System

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Published on 18 Apr 2013
Langara College
ECON 1110
Microeconomics 1110
Ch. 1
Economy- a system in which scarce resources are allocated among competing
Economy based on free market transactions is self-organizing:
o individuals act independently to pursue self-interest
responding to prices determined in open markets
collective outcome is coordinated
Main characteristics
self-interest, incentives, market prices/quantities, institutions
is the study of the use of scarce resources to satisfy unlimited human
wants and needs
o Scarce resources include land, labour, capital (capital good is a good
that can be used to make another good), materials, energy
If resources were available in infinite quality, no need for economics because
there is no need to economize, use resources efficiently.
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