ECON 208- Final Exam Guide - Comprehensive Notes for the exam ( 25 pages long!)

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: El- Attar Mayssun

Document Summary

Economic is the study of the use of scarce resources to satisfy unlimited human wants. Factors of production: land, labour, and capital (physical capital: machine) Resources are limited problem how to use limited resources to satisfy the unlimited. Resources can produce only a fraction of the goods and services desired by people. Every choice has an associated cost opportunity cost. Opportunity cost is de ned as the bene t given up by not using resources in the best alternative way. Negative sloped line: a boundary between attainable and unattainable combinations/opportunity cost. Even inside the curve, there is still a choice. Between b and c, there is no best options opportunity cost. In general, the opportunity cost for any activity includes three things: the direct cost of the activity, plus, whatever you give up in order to do the activity, minus, whatever savings the activity generates. Resource allocation determines the quantities of various goods that are produced.