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econ notes 2 - Textbook Definition of...

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Economics 200 Reff 8/27/08 Class Note #1 Intro To Economics - 5 Assumptions about Thinking When Studying Economics 1. Resources Cast More Than You Think a. Accounting Cost - $ out of your pocket. b. Opportunity Costs - Next highest valued alternative. 2. All Decisions Are Rational Ones Rational – ones behave is consisted with what one “wants”. 3. All Decisions Made At The Margin - Margins – The weighing of the additional cost and benefit of a specific change in the current situation. Marginal = Additional - Marginal Benefit (MB)=Marginal Cost (MC) => The Margin - “The straw that breaks the camels back.” is when marginal benefit does not meet the marginal cost. 4. The Answer To Most Questions Is Found In A Simple Statement: “It Depends” 5. People Are Maximizers -MB > MC
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Unformatted text preview: Textbook Definition of Economics-“Economics is the study of how individuals and society, experiencing virtually limitless wants, choose to allocate its scarce resources to satisfy these wants” Reffs Quick Definistion-Economics : unlimited wants, individuals and societies chose to allocate their scarce resources to satisfy wants.-Economics= Scarcity= Wants > Available Resources • Scarcity is when Wants > Resources (Unlimited) (Limited) • Resources are limited. • Cost – can be a social, emotional, jealousy, and monetary cost. 1 Scarce Resources Payment for Resource 1. Land Rent/Mortgage 2. Labor Wage/Salary/Tips/Commissions 3. Capitol Interests/Dividends 4. Entrepreneurship Profits/Losses 5. Time – In Debate. What Do you Think??? 2...
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