[ECO1104] - Midterm Exam Guide - Everything you need to know! (15 pages long)
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ECO 1104 Full Course Notes
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Economy: in greek, one who manages a household . It is the management of society"s resources (people, land, buildings, machinery). Scarcity: the limited nature of society"s resources. Economics: the study of how society manages its scarce resources. Economist: person who studies how people make decisions and how people interact with others. Making decisions requires trading-off one goal against another one. Ef ciency: the property of society getting the maximum bene ts from its scarce resources. Equity: the property of distributing economic prosperity fairly among the members of society. Principle #2: the cost of something is what you give up to get it. Opportunity cost: whatever must be given up to obtain some item. When calculating the cost of something you need to take into account the explicit cost and implicit cost. Principle #3: rational people think at the margin. Rational people: people who systematically and purposefully do the best they can to achieve there objectives.