ECO-2023 Final: ECON FINAL STUDY GUIDE
Document Summary
Concept that there is less of a good freely available from nature than people would like. You want marginal benefit to exceed marginal cost. Opportunity cost the highest valued alternative that must be sacrificed when choosing an option. Outlines all possible combinations of total output that could be produced, assuming a: fixed amount of productive resources: given amount of technical knowledge full and efficient use of resources. Graph bowed outward because of the concept of increasing opportunity costs: efficient points: on the curve, inefficient points: inside the curve, unattainable points: outside the curve. Shifts because of changes in: resource base, technology, rules (trade barriers, laws, work habits. When individuals engage in a voluntary exchange, both parties are better off. There is an inverse relationship between price and quantity buyers are willing to pay. Consumer surplus: difference between maximum amount consumers are willing to pay, and amount they actually pay, below demand curve, above price.
