ECON 2006 Study Guide - Fall 2018, Comprehensive Midterm Notes - Economic Equilibrium, Recession, Opportunity Cost

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12 Oct 2018

Document Summary

Economics: the study of how people allocate their limited resources to satisfy their nearly unlimited wants, the study of how people make decisions. Looks at the broader economy, including inflation, growth, employment, interest rates, and productivity: what happens if there is widespread unemployment, the study of the broader economy. Individual choice: the principles: choices are necessary because resources are scarce. In much of europe a tip is added automatically. The waiters will normally be more attentive in the united states. If a gas station lowers its prices, people would go the gas station ix. Incentives to innovate: why work hard, bear all costs (time and monetary) if someone could just steal your idea for profit, result of a strong patent system, more innovation, since people are rewarded for new popular inventions. Innovation economic growth, high standards of living. Interaction and individual choice: interaction of choices my choices affect your choices, and vice versa is a feature of most economic situations.

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