Econ Class Notes 8/28 - Intro to Econ.pdf

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ECON 203
Richard Coe

Econ Class Notes 8/28 - Scarcity - limited resources, unlimited wants. Everyone would like to allocate resources the way they see fit. If I were in charge, I’d have a bigger office, office help, reception for my students, etc... - Limited resources, I mean productive resources- things used to make stuff. Only so much stuff to go around. With these limitations, each person would prefer that these resources be allocated in a way that makes him/her best off. your preferences come in conflict with mine, and the person next door. - scarce goods - If good Z is a scarce good for you, you are willing to give up something else of value in exchange for more of good X (need not be money). Do you want more than is freely available? If so, then that good is scarce for you. Although trash and pollution aren’t scarce; they aren’t goods in a productive sense. Economists call these “bads”, and talk of pollution reduction and trash removal as “goods”. These are considered scarce. -
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