ECO 1104 Midterm: 10.08.15 (Midterm Review)

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Lawrence Harris

Document Summary

Thursday, october 8, 2015 scarcity: the limited nature of society"s resources economics: study of how society manages its scarce resources. The cost of something is what you give up to get it opportunity cost: whatever must be given up to obtain some item. People respond to incentives incentive: something that induces a person to act. A country"s standard of living depends on its ability to produce goods & services. Prices rise when the government prints too much money: society faces a short-run tradeoff between inflation and unemployment. The scientific method: scienti c method: dispassionate development and testing of theories about how the world works: experiments are often dif cult in economics. !3 normative statements: claims that attempt to prescribe how the world should be (the government should raise the minimum wage: economists offer crucial input into the policy process, but their advice is only one ingredient of a.