ECON 1B03 Lecture Notes - North American Free Trade Agreement, Economic Equilibrium, Emo

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Usman Hannan

Document Summary

Economics- the study of how society allocates its scare resources to satisfy peoples unlimited wants. Microeconomics- focuses on the individual parts of the economy. Macroeconomics- focuses on the economy as a whole. Market economy- decentralized allocations of resources by firms and households. Command/ centrally planned planned by a central authority. Resource anything that can be used to produce something else ( labour , land) Opportunity cost what you have to give up to get it. Marginal changes small incremental adjustments to an exsistant plan , usually by 1. Adam smith the wealth of nations , invisible hand. Market failure - when the market fails to properly distribute resources. Market power the ability of a single entity to unduly influence the market. Externality- additional factors not compensated for in traditional models. Normative statements - world as it should be. Ppf - a graph that shows the possible combinations of output that the economy can possibly produce given all the available factors.