ECON 111 Lecture Notes - Lecture 1: Scientific Method, Opportunity Cost

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ECON 111 Full Course Notes
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ECON 111 Full Course Notes
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Economics is the analysis of opportunity cost. Definition: economics is the study of the use of scarce resources to satisfy unlimited human wants. This definition is incomplete! The scarce resources may be natural, like land, or re- produced, like human and physical capital. Economics is about efficient ways of doing things. The true cost of something is what you give up to get it . Now suppose that d is the best alternative amongst {b,c,d}. To have a, the person must give up having d. d is the opportunity cost of a. Consider the opportunity cost of your own education. On a given week, you have 120$ to spend on food. Eating out costs 30$, and ordering takeout costs 15$. Number of ^mes you eat out. The line in this graph is called the production probability frontier (ppf) or the production possibilities boundary . In this case, the graph is linear.

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