ECO105Y1 Chapter Notes - Chapter 1: Opportunity Cost, Externality

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Scarcity : problem that arises from out limited money, time, and energy. Economics : how a party make the best possible choices to get what they want, and how those choices interact in markets. Scarcity is the problem arises when a resource is limited such as money, time, or energy. Deciding to get food with friends or spend money on clothes. How parties use their capital to grow while being challenged by scarcity. I disagree as materialism is one of the largest motivators in society, and with greater motivation comes greater creativity and innovation. Secondly, those who have no interest in lavish things or lifestyles can live as they please, in a relatively comfortable manner. Opportunity cost : the cost of giving up the second best option. To make a smart choice, the value of what you get must be greater than that of what you give/lose. From 1. 3 -> oc = give up/get.

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