ECON 200 Lecture Notes - Lecture 4: Gross Domestic Product, Opportunity Cost, Oligopoly

• School: University of Arizona
• Department: Economics
• Course: ECON 200
• Professor: Chandini Sankaran

Document Summary

Functioning of individual parts of the economy: Looks not at any particular part of the economy, but rather the economy as a whole. We aggregate (add up) the micro parts to come up with an overall picture. Total output of all goods and service produced by a country. Deflation--decrease in the overall level of prices. Total employment and unemployment in the economy. All decisions involve tradeoffs because of scarcity. To get something, we usually have to give up something else. Trade offs for students: time, money---work full time or college full time, spend my on chips or soda. Principle 2: the cost of something is what you give up to get it: Whatever must be given up to obtain some item. Principle 3: rational people think at the margin: Make decisions by comparing marginal benefits and marginal costs. Small incremental adjustments to a plan of action. Marginal benefit=additional rev from selling extra unit.