ECON 111 Study Guide - Final Guide: Ceteris Paribus, Tax Incidence, Market Clearing

• School: Queen's University
• Department: Economics
• Course: ECON 111
• Professor: Ian James Cromb

Document Summary

Economy a system in which scarce resources are allocated among competing uses. Self interest is the foundation of economic order, a free market is self organizing. The natures of private property and contractual obligations are defined by laws passed by legislations. Economics the study of the use of scarce resources to satisfy unlimited human wants. Factors of production resources used to produce goods and services; frequently divided into the basic categories of land, labour, and capital. Goods are tangible commodities and services are intangible commodities. Scarcity implies that choice must be made, and making choices implies the existence of costs. Everytime a choice is made, opportunity costs are incurred. Production possibilities boundary a curve showing which alternative combinations of commodities can be attained if all available resources are used efficiently; it is the boundary between attainable and unattainable output combinations. Scarcity is indicated by the unattainable combinations outside the boundary.