ECON 1030 Lecture Notes - Lecture 1: Comparative Economic Systems, Opportunity Cost, Thomas Robert Malthus

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Economics studies how people choose to use and allocate scarce resources provided by nature and previous generations. It is the study of how people make choices and when added up how society makes choices. Primarily the purpose of studying economics is to develop a way of thinking about problems, specifically using concepts like opportunity cost, marginal analysis, and the working of efficient markets. Opportunity cost-we have to make decisions about how to allocate our time, resources, and effort among competing options in the marketplace. The opportunity cost of a decision is the full cost of what we forego in making a specific choice. Opportunity costs arise because resources are scarce, particularly time. Marginalism- the process of analyzing the additional incremental costs or benefits arising from a choice or decision. Example: consider the development of a videogame- could take years, tons of people/resources to develop. Sunk costs of production- costs that can not be avoided because they"ve already been incurred.

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