ECN 104 Lecture Notes - Lecture 1: Invisible Hand, Externality, Tiger Woods

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: Tom Barbiero

Document Summary

The (cid:373)a(cid:374)age(cid:373)e(cid:374)t of so(cid:272)iet(cid:455)"s resour(cid:272)es (cid:894)people, la(cid:374)d, (cid:271)uildi(cid:374)gs, (cid:373)a(cid:272)hi(cid:374)er(cid:455)(cid:895) is i(cid:373)porta(cid:374)t (cid:271)e(cid:272)ause resources are scarce. A resource is anything that can be used to produce something else. Economics: the study of how society manages its scarce resources. Formal social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity. How people decide what to buy, how much to work, save, and spend. How firms decide how much to produce how many workers to hire. How society decides how to divide its resources between national defence, consumer goods, protecting the environment, and other needs. Cost-benefit analysis must be taken into account when making economic decisions. Microeconomics focuses on the individual parts of the economy. How households and firms make decisions and how they interact in specific markets. Firms want to maximize profits but are constrained by the limited resources. Individuals maximize satisfaction in regards to your limited resources.