ECON 103 Lecture Notes - Lecture 8: Ceteris Paribus, Efficient-Market Hypothesis, Market Economy
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Economy- a system for coordinating society"s productive activities. Economics- the social science that studies the production, distribution and consumption of goods and services. Market economy- an economy in which decisions about production and consumption are made by individual producers and consumers. Invisible hand- refers to the way in which the individual pursuit of self-interest can lead to good results of society as a whole. Market failure- when the individual pursuit of self interest leads to bad results for society as a whole. Economic growth- growing ability of the economy to produce goods/services. Macroeconomics- branch concerned with the overall ups and downs in the economy. Microeconomics- how people make decisions and how the decisions interact. Interaction of choices affect your choices and vise versa- a feature of most economic institutions. The result of this information are often quite different than what individuals intend. How you behave, impacts how others behave.