ECON 208- Final Exam Guide - Comprehensive Notes for the exam ( 93 pages long!)

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Alex Hale

Document Summary

The study of the use of scarce resources to satisfy unlimited human wants. A so(cid:272)iet(cid:455)(cid:859)s resour(cid:272)es are usuall(cid:455) di(cid:448)ided i(cid:374)to la(cid:374)d (cid:894)i(cid:374)(cid:272)l. (cid:374)atural resources), labour, and capital (in micro: usually machines) Outputs include: goods (tangibles, services (intangibles) Resources can only produce a fraction of the goods/services people want. Every choice has an associated opportunity cost: opportunity cost (oc): the benefit given up by not using resources in the optimal way. You have to spend on pizza ( each) and beer ( each: on the line, all has been spent, below the line: money is left over, a(cid:271)o(cid:448)e the li(cid:374)e: (cid:272)a(cid:374)(cid:859)t afford that (cid:272)o(cid:373)(cid:271)i(cid:374)atio(cid:374) The opportunity cost of 1 extra slice if pizza is of a beer that must be given up: opposite: the opportunity cost of 1 extra beer is 2 slices of pizza. Example 2 opportunity cost of a bachelor"s degree. Give up salary you could have made: (cid:886) (cid:1877)(cid:1857)(cid:1870)(cid:1871) (cid:4666)(cid:882) (cid:882)(cid:882)(cid:882)(cid:4667)=(cid:882) (cid:882)(cid:882)(cid:882)