ECO 105 Chapter Notes - Chapter 1-3: Opportunity Cost, United States Postal Service, Invisible Hand
Document Summary
Opportunity cost is fundamental to understanding how society reacts to scarcity. Economic forces --> the necessary reactions to scarcity. Market force -->an economic force that is given relatively free rein by society to work through the market. When an economic force operates through the market, it becomes a market force. Invisible hand --> the price mechanism, the rise and fall of prices that guides our actions in a market. Societies can"t choose whether or not to allow economic forces to operate-- economic forces are always operating. But, societies can choose whether to allow market forces to predominate. Social forces --> forces that guide individual actions even though those actions may not be in an individual"s selfish interest. You are an excess male (meaning more women than men) so you pay for a date undesirable because society doesn"t really accept this. Political forces --> legal directives that direct individuals" actions.
