CME101 Final: Principles of Economics Notes
Document Summary
Scarcity based on two assumptions; humans have unlimited wants but there are only finite resources. Hence we must make choices depend on incentives. Economics social science that studies choices individuals, businesses and government make as they cope with scarcity. Macroeconomics study of the performance of the national and global economy as a whole. Microeconomics study of choices that individuals and businesses make interact with market and influence government. Every choice we make is a tradeoff give up one thing for something else. Positive statement objective statements that are true or false (what is) e. g. economic theory (what ought to be) e. g. economic policies (mc=mb) Production possibility frontier set of all goods that can be produced that are that cant. Ppf illustrates opportunity cost and scarcity unattainable section. Production efficiency all resources are put to use at the lowest possible cost.
