[ECON 1B03] - Final Exam Guide - Ultimate 24 pages long Study Guide!

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Aleksandra Gajic

Document Summary

Microeconomics: focuses on the individual parts of the economy. Macroeconomics: looks at the economy as a whole. Rational people: use information they have to consider costs and benefits of some action. Perfect information: everyone knows everything they need to with certainty. Asymmetric information: imperfect information; one person has more information than the other person. Rational people make marginal changes: small incremental changes to an existing plan. The cost of something is what you give up to get it. It is the cost of the best forgone alternative. You gave up the income this is a larger foregone alternative and implicit cost: market: where buyers and sellers meet to buy/sell goods and services, physical place, online. Free markets: all decision making is decentralized. Centrally planned economy: all production and distribution decisions are made by a central authority, like a government. Mixed economy: a combination of mainly free markets and some government-run industries.