Economics 1021A/B Study Guide - Midterm Guide: Statics, Inferior Good, Demand Curve

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Charles Middleton

Document Summary

Theory of consumer try to figure out what people will buy and how much people will buy (demand and supply). Theory of firm what firms produce, how much they produce, and how do they produce it? (competition and efficiency) Labour market, capital market, income inequalities, environmental inequalities. Economics is based on making choices, based on the concept of scarcity. Scarcity individuals have unlimited desires, with limited resources. They must make decisions on what to do. We make a choice based on the concept of opportunity cost. Opportunity cost the opportunity cost of a is not doing b. The opportunity cost of b is not doing a. We measure opportunity cost with the best alternative forgone. Opportunity cost example you can study economics, you can go to a movie or you can watch t. v. If you watch t. v the cost of watching t. v is that you can"t study economics or you can"t go to the movie not both.