ECO 1104 Chapter Notes - Chapter 1-2: Planned Economy, Macroeconomics, Fiscal Policy

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Lawrence Harris

Document Summary

Greek for one who manages a household . Scarcity the limited nature of society"s resources. Economics the study of how society manages its scarce resources. All decisions involve tradeoffs; there"s no such thing as a free lunch i. e. going to a party the night before an exam leaves less time for studying. Ef ciency refers to the property of society getting the most it can from its scarce resources. Equity refers to the process of distributing economic prosperity fairly among society"s members. Essentially, you cannot gain one thing without losing something else. Principle #2: the cost of something is what you give up to get it. All decisions require comparing the costs and bene ts of alternative costs. An opportunity cost refers to whatever must be given to obtain some item i. e. the cost of going to university is not only the payment of tuition costs and books, but also the cost of forgone wages.