ECON 101 Study Guide - Midterm Guide: Marginalism, Opportunity Cost, Demand Curve
7 Jan 2020
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Making more g/s a=making less of g/s b. Butter: opportunity cost to every decision choices center around 3 questions. Who gets what"s produced: ppl are rational & think at the margin. Marginal benefits (mb) vs marginal costs (mc) Agents proceed with action only when benefits outweigh costs. Consciously & subconsciously: trade can make everyone better off. National security: ppl respond to incentives. Decisions change: markets are usually a good way to organize economic activity. Transactions btwn buyers & sellers (potential) for g/s: governments improve market outcomes (sometimes) Gov intervention may be beneficial in cases of market failure. Allocation of resources & production decisions made by some ruling class or gov. Most decisions result btwn interactions of buyers & sellers w/ significant gov role in resource allocation. Shows all feasible combinations of possible outputs given fops & tech. Getting all you can from resources available. Particular pt matching w/ current supply & demand. Agents are price-takers in input & output markets.
