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week1-082 - up to attain something or satisfy a want COST...

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1 Lecture Topics Define economics (it’s about the allocation of scarce resources) Introduce economic basics Scarcity, Choice, Cost Cost-Benefit Principle Marginal Analysis and Decisions Microeconomics... Microeconomics... The study of how households and firms make decisions and how they interact in markets. Macroeconomics... The study of economy-wide phenomena, including inflation, unemployment, and economic growth. Scarcity . . . never enough time, money, or energy to do everything we want or have everything we want. Scarce resources: labor land capital technology time
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2 SCARCITY SCARCITY CHOICE CHOICE The existence of scarcity forces us to choose. $35 Oakland $25 Waterfront $10 Benefit ??? Cost SCARCITY CHOICE CHOICE The cost of something is what you give up to get it. Choosing one alternative over another has a cost associated with it. Opportunity cost is the highest valued alternative that must be given
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