ECON 1201 Lecture 1: ECON 1201 8-28
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Chapter 1: choices are necessary because resources are scarce. Resource: anything that can be used to produce something else. Scarce: short supply, a resource is scarce when not enough resource is available to satisfy all the various ways society wants to use it. Opportunity cost: what you must give up in order to get something. Us vs europe tipping system more incentive in the us for better service. Trade-off: comparison of the costs and the benefits of doing something. Trade: allows us to consume more than we otherwise could (e. g. money for. How much is a decision at the margin. People usually respond to incentives, exploiting opportunities to make themselves better off. There are gains from trade product, barney and fred from the flintstones) Markets move toward equilibrium doing something different provide to the market. Equilibrium: an economic situation in which no individual would be better off. Specialization: the situation in which each person specializes in tasks that can.
