Class Notes (838,343)
Canada (510,861)
Economics (1,296)
ECN 104 (447)

ECN104 Notes 2012.docx

5 Pages
Unlock Document

ECN 104

ECN104 Notes 2012 Alvina Gilani Economics is the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants. Ceteris Paribus (Other Things Equal): It is assumed that all other variables except those under immediate consideration are held constant for a particular analysis.  Microeconomics focuses on the individual parts of the economy.  Macroeconomics looks at the economy as a whole. Positive statements are statements that attempt to describe the world as it is Normative statements are statements about how the world should be: Two Fundamental Facts together constitute the economic problem and provide foundation for economics: 1‐) Society’s wants are unlimited and insatiable
 2‐) The resources for producing goods and services are scarce. Utility: the satisfaction or pleasure a consumer obtains from the consumption of a good or service. Budget Line: finite amount of income (let say $120) to be distributed over two goods (DVD and Book) Economic resources: all natural, human, and manufactured resources that go into production of goods and services. Property resources: land, property, buildings, investmentsj Human resources: Labour: all physical and mental talents and efforts of individuals used in production These four resources are called the factors of production. Resource Payments Land ← Rent
 Capital ← Interest
 Labour ← Wage
 Entrepreneurial Ability ← Profits or Loss Capital goods vs. Consumer Goods Consumer goods satisfy wants directly while capital goods do so indirectly by aiding the production of consumer goods.Two kinds of efficiency:
 Productive Efficiency: production of goods and services in the least costly way Allocative Efficiency: production of goods and services most wanted by society. Law of Increasing Opportunity Cost
 Opportunity Cost: The amount of other products that must be sacrificed to obtain one of specific good Opportunity cost increases with amount produced:
 As we make more pizzas, the # of robots we have to give up (per pizza) increases Marginal Benefit: the extra benefit associated with consuming one more unit Marginal Cost: the extra opportunity cost of that extra unit Resources are being efficiently allocated when MB=MC.  If MB>MC, too few is produced
  If MC>MB, too many is produced Chapter 2 2 ECONOMIC SYSTEMS:  Market Systems o Private individuals and firms own l
More Less

Related notes for ECN 104

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.