ECO 1001 Chapter Notes -Marginal Cost, Opportunity Cost, Marginalism
Document Summary
Chapter 1: the scope and method of economics. Economics: the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. The government decides how the resources are allocated. Highest level- government, businesses, communities: opportunity cost- what you give up for something else, marginalism- the cost of one more unit (incremental cost, efficient markets- the market takes the resource and maximizes the returns/gains for that resource. Rational thinking is based on knowledge, data, and analysis. The study of economics is an essential part of the study of society. To be an informed citizen requires a basic understanding of economics. Microeconomics: the branch of economics that examines the functioning of individual industries and the behavior of individual decision-making unites- that is, firms and households. Macroeconomics: the branch of economics that examines the economic behaviors of aggregates-income, employment, output, and so on- on a national scale.
