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Lecture 2

ECON 101 Lecture Notes - Lecture 2: Marginal Cost, Opportunity Cost, Marginal Utility

2 pages76 viewsFall 2017

Department
Economics
Course Code
ECON 101
Professor
Anichul Khan
Lecture
2

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ECON-101(Lecture(2(Notes(–(Chapter(1:(What(is(Economics?(
Definition(of(Economic(
We#want#more#than#we#can#get#
o Scarcity#–#inability#to#fulfill#our#wants#->#choices#->#incentive#–#reward#or#penalty#
of#different#choices#e.g.#price#
Microeconomics#–#individuals,#businesses#
o Why#do#people#shop#on#Amazon?#
Macroeconomics#–#national#and#global#economy#
o What#happened#in#the#US#in#2008?#
Two(Big(Economic(Questions(
How#do#choices#affect#what,#how,#for#whom#goods#and#services#are#produced?#
o What:#varies#across#countries#and#changes#over#time#
o How:#depends#on#the#technology#and#resources#available#->#factors#of#
production#
§ Land:#gifts#of#nature:#water,#oil,#minerals,#air,#gas,#coal,#air,#forests,#fish,#
etc.#
§ Labour:#work#time#and#effort#that#people#devote#
§ Capital:#tools,#instruments,#machines,#buildings##
Does#not#include#financial#capital#(money)#
§ Entrepreneurship:#person#organizing#it#all#
o For#whom:#depends#on#income##
§ The#more#money#you#have,#the#more#you#can#
buy#
Does#self-interest#also#promote#social#interest?#
o Self-interest:#the#best#option#for#you#
o Social#interest#the#best#option#for#society#
§ Efficient:#can’t#be#improved,#the#best#option#
§ Issues:#globalization,#climate#change,#economic#instability#
(
INCOME#
Land#->#rent#
Labour#->#wages#
Capital#->#interest#
Entrepreneurship#->#profit#
#
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