ECN 104 Study Guide - Midterm Guide: Ceteris Paribus, Productive Efficiency, Consumer Choice
18 Jan 2018
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10 key concepts to retain for a lifetime: the individual, facing trade-offs, opportunity costs, choosing a little more or less, the influence of incentives, ex. Going to a restaurant for your favourite dish, but getting a deal 2 for 1 hamburgers for the same price as your favourite dish. Interaction among individuals: specialization and trade, ex. If you try to take into account every change in the economy, then nothing will get done: graphical expression. Individual units (household, film, industry) and their decision-making process. Macroeconomics examines: the whole economy, the subdivisions or aggregates. Positive economics: the analysis of facts to establish cause-and-effect relationships. Normative economics: the part of economics involving value judgements about what the economy should be like. Individuals need to make choices because economic wants are unlimited but the means are limited: average income in every country is different, limited income: Income is finite even for the wealthiest: unlimited wants, wants are insatiable, wants change over time.
