CAS EC 101 Study Guide - Midterm Guide: Money Supply, Commodity Money, Economic Equilibrium

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Michael Manove

Document Summary

Lec 1: introduction: think about the goods, not money. Stock market crashed and total value of stocks dropped by million, but the. Factories are still producing the same as before. Products did not disappear from society did not become million poorer ( material wealth stays the same) stores: almost everything has a cost. Opportunity cost -what you sacrifice by doing what you are doing. Ex: cost of getting an a=party night: people respond to incentives-sometimes in unexpected ways. Prices that reflect all opportunity costs provide the best incentives. Highway congestion has costs (i. e. people"s time) Highway tolls (prices) should reflect the the cost of congestion. Economics- the scientific study of human behavior associated with the production and distribution of the necessities and conveniences of life . Goods and services people need or want. Phrase contained in the first sentence of adam smith"s wealth of nations. Production - transformation of some goods and services (inputs) to other goods and.