ECN 104 Chapter 1: ECN104 - Chapter 1 and 2

• School: Ryerson University
• Department: Economics
• Course: ECN 104
• Professor: Tsogbadral Galaabaatar

Document Summary

The limited nature of society"s resources: economics. The study of how society manages its scarce resources. Society faces an important tradeoff: efficiency vs. Equality: efficiency, when society gets the most from its scarce resources, equality, when prosperity is distributed uniformly among society"s members, tradeoff, to achieve greater equality, could redistribute income from wealthy to poor. But this reduces incentive to work and produce, shrinks the size of the economic pie. : principle #2: the cost of something is what you give up to get it. Making decisions requires comparing the costs and benefits of alternative choices. The opportunity cost of any item is whatever must be given up to obtain it. It is the relevant cost for decision making. E. g. , the opportunity cost of going to college for a year is not just the tuition, books, and fees, but also the foregone wages;