ECON 1000 Study Guide - Final Guide: Invisible Hand, Canada Revenue Agency, Indifference Curve

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ECON 1000 Full Course Notes
ECON 1000 Full Course Notes
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Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand. Opportunity cost is the value of a product forgone to produce or obtain another product. Production possibility frontier (ppf) boundary between unattainable and attainable production possibilities shows maximum combinations of outputs given resources and technology. A linear (straight line) ppf has, homogeneous resources and constant opportunity costs. Marginal cost (mc: opportunity cost of producing 1 more unit increasing marginal cost. Marginal benefit (mb: benefit from consuming 1 more unit, decreasing marginal benefit. Allocative efficiency (efficient use of resources) where mc = mb. Preferences and marginal benefit: preferences are a description of a person"s likes and dislikes. To describe preferences, economists use the concepts of marginal benefit and the marginal benefit curve. The expansion of production possibilities and increase in the standard of living is called economic growth.

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