Study Guides (400,000)
CA (150,000)
Ryerson (10,000)
ECN (400)
ECN 104 (100)
Study Guide

ECN 104 Study Guide - Comprehensive Midterm Guide: Human Resources, Physical Capital, Market Failure


Department
Economics
Course Code
ECN 104
Professor
Teresa Fung
Study Guide
Midterm

This preview shows pages 1-3. to view the full 22 pages of the document.
Ryerson
ECN 104
MIDTERM EXAM
STUDY GUIDE

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

ECN 104
Sept 6, 2016
Lecture 1: Chapter 1 – introduction to microeconomics
- what is economics
othe study of the use of scarce resources to satisfy unlimited Human wants
oeconomics is the social science concerned with the efficient use of scarce resources to
obtain the max satisfaction of society’s unlimited wants
in both of these definitions it shows that economics is focused around resources
and involves the unlimited amount of wants for people
however even though there are unlimited wants the actual resources are
scarce/ restricted
therefore, you need to know how to balance between what is wanted and what
can actually be given
oeconomics is the social science concerned with how individuals, intuitions, and society
make optimal (best) choices under conditions of scarcity
oeconomics is the social science that studies the choices that individuals, businesses,
government and entire societies make as they cope with scarcity and the incentives
that influence and reconcile those choices
both involve choices that must be made and scarcity of those resources
- basic economic concepts
oscarcity leads to choices
oincentives lead to decisions which then lead to opportunity cost
opportunity cost: is the terms of the (highest-value) alternatives foregone
oexample
given for options must choose one, if A is chosen then you will have an
opportunity cost be giving up on choices B, C and D
however later now the options have value A=100, B=80, C=60, D=40
therefore, A is chosen since the value is the highest
therefore, the opportunity cost is the next best option which is B
- the economic problem of a consumer
oLimited income
oUnlimited wants: bundle of goods/services
oThe budget line: list out the options
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

ECN 104
Sept 6, 2016
Example: given $120 to buy DVDs and books. What are the options if the price
of a DVD is $20 and the price of a book is $10
Budget line: shows the possible combinations of DVDs and books which can be
bought with $120. Given the prices of the products (DVD and book)
DVD ($20) Book($10) Total expenditure
6 0 120= 120+0
5 2 120=100+20
4 4 120=80+40
3 6 120=60+60
2 8 120=40+80
1 10 120=20+100
0 12 120=0+120
on the graph the points make a line
every point in the triangle of the graph is an option that can be chosen, (since
you don’t have to use all of the $120 (all those options are attainable)
whatever is above the line is considered unattainable, since there is not enough
money to purchase higher
the equation is therefore 20y + 10x = 120 (using the 3 amounts that were given
in the beginning of the question)
when converted the equation is y= 6 – 0.5x (x being the amount of
books purchased, and y being the amount of DVDs purchased)
slope can be found by dividing the y/x = 6/12
slope can also be found by dividing the price of the book by the price of
the DVD. Therefore being 10/20
there is also a ratio of DVDs to books which is 1:2
oif the DVD price was 40 then therefore the price of a book is 20
- There is no free lunch (saying )
oResources are used to produce goods and services
oThese resources have alternative uses
oSociety gives up something else to get the “free” goods produced
oFree to individuals but never free to society
oTherefore, is health care free in Canada?
No, tax payers pay
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version