ECON 1000 Lecture Notes - Marginal Utility, Marginal Cost, Opportunity Cost

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Shadab Qaiser

Document Summary

Scarcity our inability to satisfy all of our wants => must make choices: every choice involves a tradeoffs giving up one thing to get something else. Opportunity cost the highest valued alternative that we give up to get something is the opportunity cost of the activity chosen. Economics is a social science that studies how individuals, businesses, governments, and entire societies cope with scarcity and make best possible choices/decisions given the resources constraints that they face. Incentive - is a reward that encourages an action or a penalty that discourages an action. People make choices at the margin, which means that they evaluate the consequences of making incremental changes in the use of their resources. Marginal benefit -the benefit from pursuing an incremental increase in an activity. Marginal cost - the opportunity cost of pursuing an incremental increase in an activity. Goods and services are the objects that people value and produce to satisfy human wants.