ECO-2013 Study Guide - Comprehensive Midterm Guide: Physical Capital, Cople, Open Market Operation
Document Summary
What is economics about: economics tries to explain and predict the behavior of consumers, firms, and government, alfred marshall. Scarcity leads to tradeoffs which result in making choices. Scarcity requires that some wants remain unfulfilled. Issues of equity, justice, and fairness are embedded with scarcity: historically, mechanisms that have been used to deal with the problem of scarcity: The economic way of thinking: always have these guidelines in your economic thought process: Think on the margin, not in total or on average. More information leads to better decision making, but more information is costly to get. Economic thinking is scientific thinking: there are always tradeoffs. Referred to as economizing behavior- try to get the most benefits for the least cost or effort. As the incentive goes up, you will be more likely to do something and vice versa. The i(cid:374)(cid:272)e(cid:374)ti(cid:448)e does(cid:374)"t ha(cid:448)e to (cid:271)e (cid:373)o(cid:374)ey: think on the margin, not in total or on average.
