AREC 202 Lecture Notes - Lecture 3: Opportunity Cost
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1 Sep 2016
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Tuesday, august 30, 2016 week 2 day 1. Arec 202 chapter 1 cont: principle 5: there are gains from trade. In a market economy, individuals engage in trade: they provide goods and services to others and receive goods and services in return. There are gains from trade: people can get more of what they want through trade than they could of they tried to be self-suf cient: principle 6: markets move toward equilibrium. An economic situation is in equilibrium when no individual would be better off doing something different. Any time there is a change, the economy will move to a new equilibrium: principle 7: resources should be used as ef ciently as possible to achieve society"s goals. An economy is ef cient if it takes all opportunities to make some people better off without making other people worse off.
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