Economics 1021A/B Lecture Notes - Lecture 1: Marginal Utility, Marginal Cost, Opportunity Cost

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Shearer

Document Summary

Economics is the social science that studies the choices that individuals, businesses, and societies make as they cope with scarcity and incentives that influence those choices. Scarcity is the inability to satisfy all of our wants. An incentive is a reward that encourages or discourages you from an action. The objects that people value and produce to satisfy human wants are called goods and services. Factors of production are the resources used to produce goods and services. Factors of production are grouped into four categories: Land- the "gifts of nature" that we use to produce goods and services. Labour- the work time and effort that people devote to producing goods and services. Choices that are best for the individual are self-interest choices, while choices that will benefit society as a whole are in the social interest. Resource use is efficient when it isn"t possible to make someone better off without making someone else worse off.