ECON 2020- Midterm Exam Guide - Comprehensive Notes for the exam ( 23 pages long!)

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Trade/exchange: when it is produced over seas= international trade, when it"s produced in our country= domestic trade (cid:523)most common(cid:524, trade is the fundamental action in exchange. Four properties of trade: voluntary exchange- not forced, do it because you think you would be better off with the product, helps both sides, 1. Trade creates value- better off after the exchange creates value: trade is a positive-sum game many interactions in life are zero-sum game but trade makes it a zero-sum game, differences are beneficial. Lecture 2: the economic way of thinking: about founding ideas that you base everything else on, sees people approaching the world in two visions: unconstrained vision vs. Constrained vision: scarcity: societies resources are limited & they fall short of wants and desires we have to pick an chose our problems, opportunity cost: the highest forgone alternative. Scarcity choices tradeoffs (want more of x need to have less of y)