ECO-2013 Study Guide - Final Guide: Mutual Fund, Loanable Funds, Federal Funds Rate
Document Summary
Adam smith - father of economics o o says that wealth is not about gold or silver, it is about producivity. Invisible-hand principle self-interest leads to helping others; you have to igure out how to help people in order to earn money. Almost everything is scarce (this is an objecive statement) We have to make choices goods must be raioned o. There"s no such thing as a free lunch. Jimmy john"s recently ofered pracically free () sandwiches but the total cost involved waiing in a long line: don"t confuse scarcity with poverty. 8 guideposts to economic thinking o the use of scarce resources is costly, so decision makers must have trade-ofs. All economics is based on this statement incenive a threat of a reward or punishment; responses to incenives vary; altering incenives alters behavior. The peltzman efect, 1975 good intenions do not guarantee desirable outcomes o individuals make decisions at the margins. Don"t do these things o o o o.
