[ECON 1B03] - Final Exam Guide - Ultimate 115 pages long Study Guide!

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29 Nov 2016
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ECON 1B03 Full Course Notes
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ECON 1B03 Full Course Notes
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Economics: the study of how society allocates scarce resources to satisfy society"s unlimited wants. Scarcity: means that society has limited resources and therefore cannot produce all the goods and services people wish to have. Microeconomics: focuses on the individual parts of the economy. How households and rms make decisions and how they interact in speci c markets. Macroeconomics: looks at the economy as a whole. Economy-wide phenomena, including in ation, unemployment, and economic growth. Market economy: allocates resources through the decentralized decisions of rms and households. Households decide what to buy and who to work for. Firms decide who to hire and how much to produce. We assume that when people are making decisions, they are acting rationally. Economic rationality: systematically and purposefully using information to make the best decisions for oneself to achieve one"s objectives. Perfect information: everyone knows everything with no uncertainty. Asymmetrical information: when someone knows more about something than does someone else.

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