ECON 1B03 Chapter Notes - Chapter 1: 2009 Australian Federal Budget, Marginalism, Opportunity Cost
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ECON 1B03 Full Course Notes
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Unit 1: the nature and method of economics - objective 1: Since society"s resources (like labour, land, and machinery) are in limited amounts, it is not possible to produce all desired goods and services. For example, at an individual level, studying more hours of economics means there are fewer hours available for other activities like studying other subjects, working, or engaging in leisure activities. In the wake of the current global economic crisis, governments have to choose the optimal combination of infrastructure spending and tax reduction to implement so as to achieve the goal of stimulating their national economies. Principle 2: the cost of something is what you give up to. Due to the fact that resources are scarce, before we decide on using them for one purpose, an evaluation and comparison of the costs and benefits of alternative uses for these resources must be conducted. The concept of opportunity cost is central to the study of economics.