ECON 2000 Chapter Notes - Chapter 1: Economic Model, Macroeconomics, Fallacy

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18 Jun 2014
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Chapter 1: the scope and method of economics. To learn a way of thinking, to understand society, to understand global affairs, to be an informed citizen: the scope of economics. Microeconomics and macroeconomics, the diverse fields of economics: the method of economics. Economics- the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. Things are thought to be limited in daily: Opportunity cost- the best alternative that we forgo, or give up, when we make a choice or decision. To be sleeping or to work and earn for this hour. Note that you could only be doing 1 other thing. Marginalism- the process of analyzing the additional or incremental costs or benefits arising from a choice or decision. Sunk costs- costs that cannot be avoided because they have already been incurred. Efficient market- a market in which profit opportunities are eliminated almost instantaneously.

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