[ECO 211] - Midterm Exam Guide - Comprehensive Notes for the exam (49 pages long!)

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ECO 211 Full Course Notes
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ECO 211 Full Course Notes
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Economics--study of how we allocate resources under scarcity, we don"t have everything we want/resources not unlimited o o. Marginal (incremental) benefit & marginal cost--firm hires workers as long as benefit>cost of hiring. Equilibrium--a system at rest (no tendency for movement/change) Opportunity cost--what else could we be doing? (ex: picking different college, working instead) o o. Positive economics--more scientific, world as it is, objective. Empiricism--using facts & data to do analysis, testing. Economics difficult because involves people (not principles of nature), who are fickle & often you can"t conduct experiments (people change, can"t investigate them honestly) Models we create are often drastic simplifications of reality, model should just help you understand reality or make predictions. Assumptions--things we assume to be true, not necessarily that they are true (ex: assumption of rationality, number of goods we look at, people try to maximize utility) Widening return to being educated (pays off to be educated) Goal of firm: maximize profit q: quantity of firm.