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Lecture 1

Lecture 1-The Economic Way of Thinking


Department
Economics
Course Code
ECO101H1
Professor
Jack Carr
Lecture
1

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ECO100
James E. Pesando
Tuesday, September 11, 2009.
The Economic Way of Thinking
The Economic Problem
SCARCITY requires CHOICES
- Limited resources
- Unlimited wants
Economic Decision Making
#1 People Face Tradeoffs
#2 The Cost of Something is what You Give Up to Obtain It
(Opportunity Cost)
Def. OPPORTUNITY COST
The opportunity cost of an action is what one forgoes (fives up) by not taking the
best alternative action.
Insights:
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(2) Opportunity cost includes time cost as well as money cost.
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