MGEA02H3 Lecture Notes - Lecture 1: Opportunity Cost

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEA02H3
• Professor: John Parkinson

Document Summary

Market econ: production/consumption results from decentralized decisions by many firms/ppl. Invisible hand: way which individuals pursuit of self-interests leads to good results for society. Micro-econ: study of how individuals make decisions and how these decisions interact. Macro-econ: concerned with overall ups and downs in the economy. Market failure: sometimes individual pursuit of one"s own interest can make society worse. Econ growth: growing ability of econ to produce goods/services. 4) society responds to incentives, exploiting opportunities to make themselves better off. 5) there are gains from trade: gains arise from specialization or division of tasks, economy produces more when everyone specializes/trades. 6) since society responds to incentives, markets move towards equilibrium: equilibrium: situation where no one would be better off doing something else. 7) resources should be used as efficiently as possible to achieve society"s goals: efficient when resources used in a way that has fully exploited all opportunities to make everyone better off, equity: everyone gets fair share.