ECON 1000 Study Guide - Fall 2019, Comprehensive Final Exam Notes - United States Dollar, Social Science, Reservation Price
Document Summary
Microeconomics: the branch of economics which studies how individual decision makers behave and interact with each other, often with a focus on how households and firms behave and interact with each other. Distinction between positive and normative statements: economic approach logical method of approaching and solving economic problems. Examples of positive vs. normative statements: normative: the government should increase the minimum wage to help poor people, positive: a minimum wage increases unemployment among young and unskilled workers. Absolute advantage if you can produce more of the good with a common amount of productive resources. Opportunity cost: value of the next best alternative that must be forgone in order to undertake the activity. If the opportunity cost of producing the good is lower. Voluntary trade: makes all parties to the trade individually better off. Intuition: if a voluntary trade did not make an individual better off, then she would simply choose not to trade.
