ECO100Y5 Chapter Notes - Chapter 1: Economic Model, Opportunity Cost, Marginal Utility

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2 Oct 2014
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ECO100Y5 Full Course Notes
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ECO100Y5 Full Course Notes
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Scarcity a situation in which unlimited wants exceed the limited resources available to fulfill those wants. Economics the study of the choices people make to attain their goals, given their scarce resources. Economic model a simplified version of reality used to analyze real- world economic situations. Market a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade. As we study how people make choices and interact in markets, we will return to three important ideas: people are rational. The economic incentive to banks, for instance, is clearer to economists than to fbi agents: it is less costly to put up with bank robberies than to take additional security measures: optimal decisions are made at the margin. Most decisions in life involve doing a little more or a little less.

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