ECN 101- Midterm Exam Guide - Comprehensive Notes for the exam ( 18 pages long!)

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Ten key concepts to retain for a lifetime. The individual: facing trade-offs - you have to give up something to gain something else, everyone has to do trade-offs because sources are scarce. Money is time: opportunity costs we are incurring them all the time. There are implicit costs the cost of you attending university the monetary costs are the tuition, food, books, etc. Marginal analysis: the influence of incentives individuals respond to incentives. Each market is an institution where people are interested in exchanging a. 9. increasing the amount of goods and services, then inflation will happen. Scarcity of economic resources restricts options and requires choices. The opportunity cost of a choice is what forgone for that choice. Purposeful behaviour we assume rational behaviour, we always compare benefits and costs when making decisions. Testing this hypothesis by comparing the actual outcomes to the hypothesis predictions. Microeconomics examines individual units (household, firm or industry) and their decision making process.

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