[ECON 1020] - Final Exam Guide - Comprehensive Notes for the exam (29 pages long!)

• School: University of Denver
• Department: Economics
• Course: ECON 1020
• Professor: Paula Cole

Document Summary

Neoclassical economics: one of many schools of economic thought. The majority of economists subscribe to this perspective, and as such, it is often referred to as mainstream economics. Neoclassical definition of economics: economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. The key words in this definition is choose and scarce. In large measure, it is the study of how people make choices. The choices that people make, when added up, translate into societal choices. Key components of the neoclassical economic way of thinking. Opportunity cost: the best alternative that we forgo or give up when we make a decision. Marginalism: the process of analyzing the additional or incremental costs or benefits arising from a choice. Efficient market: a market in which profit opportunities are eliminated almost instantaneously. Every society has some system or process that transforms its scarce resources into useful goods and services.