ECO 211 Chapter Notes - Chapter 1: Opportunity Cost
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6 Sep 2016
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ECO 211 Full Course Notes
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Economists study all human behavior, because they study choices. Economic agent--an individual or a group that makes choices (ex: consumer, parent, student, citizen, worker, business, army, government) Scarce resources--things that people want, where the quantity that people want exceeds the quantity that is available. Scarcity--having unlimited wants in a world of limited resources. Economics--study of how agents choose to allocate scarce resources & how these choices affect society. Positive economics--analysis that generates objective descriptions or predictions about the world that can be verified with data. Normative economics--analysis that prescribes what an individual or society ought to do, dependent often on subjective judgements. Economic analysis: describes what people actually do (positive economics, recommends what people ought to do (normative economics. Ethical judgements unavoidable here, few policies make everyone better off. Optimization--trying to choose the best feasible option, given the available information, people decide what to do by weighing pros & cons.
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