ECON101 Chapter Notes -Overproduction, Takers, Fixed Cost

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Eva Lau

Document Summary

Scarcity: the inability to satisfy all of our wants and needs. Incentive: a reward that encourages an action or a penalty that discourages one. Economics: the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. Microeconomics: the study of choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments. Macroeconomics: the study of the performance of the national economy and the global economy. Goods and services are produced using the factors of production: Labour work time and effort by people (quality depends on human capital) It depends on the incomes that people earn. How can the pursuit of self-interest promote the social interest: self-interest. A choice that is the best one available to you: social interest.