ECN 104 Study Guide - Final Guide: Tax Rate, Deadweight Loss, Tax Wedge

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: John Isbister

Document Summary

Individual choice decision by an individual of what to do, which is necessarily involves a decision of what not to do. Basic principles behind the individual choices: resources are scarce something else. A resource is anything that can be used to produce. Resources are scarce the quantity available isn"t large enough to satisfy all productive uses. If a resource is not scarce, it is not an economic issue: the real cost of something is what you must give up to get it. Opportunity cost is crucial to understanding individual choice. All costs are ultimately opportunity costs: how much? is a decision at the margin trade-of when you compare the costs with the benefits of doing something. Decisions about whether to do a bit more or a bit less of an activity are marginal decisions. Making trade-offs at the margin: comparing the costs of doing a little bit more of an activity versus doing a little bit less.