ECON 208 Lecture Notes - Lecture 1: Comparative Advantage, Mixed Economy, Division Of Labour

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Mayssun El- Attar Vilalta

Document Summary

Chapter 1. 2 the complexity of modern economics. Many economic transactions: shipments arrive, final goods, raw materials, parts of cars, oils, etc. Individuals provide the goods and services other individuals desire. Self organizing: who/what provides the goods and services. Services are provided b/c the providers are thinking of their own benefit, not necessarily for consumers" benefit. Prices + quantities are set in free markets which individuals trade voluntarily. Institutions, created by the state, protect private property & enforce contractual obligations (crucial to make a free market work) Efficiency: refers to organizing available resources to produce goods + services ppl most value, when they most want them, by using the fewest resources possible. In order to achieve objectives, maximizing consumers + producers make marginal decisions. They decide whether they will be made better off by buying/selling a little less of any given product. *payments for goods and services travel in same order, vice versa. Production displays specialization and division of labour.