econ 001.pdf - ECONOOI-lntrotomicroeconmic.ro economics trade-offs ALL the opportunity cost opportunity cost people that alternatives direct monetary =

econ 001.pdf - ECONOOI-lntrotomicroeconmic.ro economics...

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ECONOOI-lntrotomicroeconmic.ro economics : the study of how people make choices under conditions of scarcity & the results of those choices for society trade-offs : ALL the alternatives that we give up when we make a choice opportunity cost : most desirable alternative given up when you make a choice opportunity cost = direct monetary cost t net benefit of next best alternative benefit cost Beyonce"swn-/# } the O.c of going to beyonce ' 's concert is $10 Rihanna 's convert ( next best alt . ) $50 $40 market : buyers t > sellers p perfect competitive : Qs ° identical goods ° buyers ' " " en are price takers o all goods - same price , equilibrium : Q = Q - a p* ! S D l l Qb o p > p * - or Qs > QD ( excess supply ) i Q o p L P * to QD > Qs ( excess demand ) Q* consumer behavior satisfaction consumer preferences indifference curves : plots out all of the consumption bundles that provide a consumer wt the same level of utility - curves further from origin = higher utility Qy - curves never cross ( transitivity ) diminishing MRS i. on :c : : .in : " diminish : :a : : : 't : : : " summon .
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