ECON 211 Lecture Notes - Lecture 1: Opportunity Cost, Theory-Theory
Document Summary
Econ 211: gender in the economy economic principles and terms. We study how people make choices: neoclassical economics. Concerned with decision making under conditions of scarcity. Scarcity: state where resources are limited: some scarce resources: time, money, oil. Opportunity cost: the value of the next best alternative: ex: the opportunity cost of coming to class might be work, sleep, or video games. Positive: factual statement; objective (the way things are in the world: ex: the current president of the united states is barack obama. Normative: statement f desire or wishes; subjective (opinion, or the way someone thinks the world should be: ex: i should be the president of the united states . Central economics problem: how to allocate scarce resources in order to maximize well being. Utility: how economists de ne well-being or satisfaction (utility= measure of happiness) Rationality: the ability to choose the option that maximizes utility given the knowledge of available opportunities: economists assume people are rational.
