Economics 1022A/B Lecture Notes - Lecture 1: Pareto Efficiency, Marginal Utility, Marginal Cost

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Sunghoon Cho

Document Summary

Inability to satisfy all our wants is scarcity. An incentive is a reward encourage an action/penalty that discourages an action. How do choices end up determining what, how, and for whom goods and services get. What determines these patterns of production? (canada specialize in service produced? industry, china in manufacturing, and ethiopia in agriculture) Even if you own the building, you still have to implicitly pay the rent. If it is not possible to make someone better off without making someone else worse off. An exchange - giving up one thing to get something else. Opportunity cost is the highest value alternative. A rational choice is one that compares costs and benefits and achieves the. People make rational choices by comparing benefits and costs greatest benefit over cost for the person making the choice. Cost is what you must give up to get something. Most choices are how much choices made at the margin.