ECON 203 Lecture Notes - Lecture 3: Omnipotence, Opportunity Cost, Market Economy

• School: University of Calgary
• Department: Economics
• Course: ECON 203
• Professor: Peter Tracey

Document Summary

Economics: the study of how society manages its scarce resources. 10 principles of economics: people face tradeoffs. Ef ciency: the property of society getting the maximum bene ts from its scarce resources. Equity: the property of distributing economic prosperity. Fairly among the members of society: the cost of something is what you give up to get it. Opportunity cost: whatever must be given up to obtain some item: rational people think at the margin. Rational people: people who systematically and purposefully do the best they can to achieve their objectives. Marginal changes: small incremental adjustments to a plan of action. It is thinking about where were are and what does this change mean to use now: people respond to incentives. Incentive: something that induces a person to act: trade can make everyone better off. Property rights: the ability of an individual to own and exercise control over scarce resources: markets are usually a good way to organize economic activity.