ECON 1116 Lecture Notes - Lecture 1: Imperfect Competition, Marginal Utility, Marginal Cost
10 Feb 2017
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Economics- a theory of human behavior and used to explain several different social phe(cid:374)o(cid:373)e(cid:374)a"s (cid:894)e(cid:454): legal rules, atte(cid:374)di(cid:374)g (cid:272)ollege(cid:895) Scarcity- a situation in which unlimited wants exceeds the limited resources available to fulfill those wants. Economists study choices using economic models (simplified versions of reality used to analyze real world economic situations) Results in tradeoffs and costs in all actions. Normative analysis- what the world ought to be. Decrease in price of fast food/ non-active entertainment options) Ex 2: estonia, circa 2007- low fertilit(cid:455) rates (cid:271)e(cid:272)ause of (cid:373)other"s salar(cid:455: optimal decisions are made at the margin- comparing marginal benefits/costs to dictate action. Marginal benefit- additional benefit incurred by one-unit increase in some action. Marginal cost- additional cost incurred by one unit increase in some action. Most decisions involved doing a little more of or a little less of. Both have benefits and costs- watch a little tv then. Individuals, firms and governments decide on the goods/services that should be produced.
