chapter 1 - Chapter 1 Economics 01/16/08 Market- group of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 Economics 01/16/08 Market- group of buyers and sellers of a good/service and the institution or arrangement by which they come together to trade 3 important ideas o People are rational- ppl use all available info to achieve their goals o People respond to economic incentives o Optimal decisions are made at the margin- continue any activity up to the point where the marginal benefit equals the marginal cost Marginal analysis- comparing marginal benefits and marginal costs Trade-offs- idea that because of scarcity, producing more of one good/service means producing less of another good/service 3 fundamental questions o What goods/services will be produced? o How will goods/services be produced? o Who will receive the goods/services? Centrally planned economy- govt decides how economic resources will be allocated Market economy- decisions of households and firms interacting in markets allocate economic resources Mixed economy- most economic decisions result from the interaction of buyers
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/08/2008 for the course ECO 001 taught by Professor Gunter during the Spring '06 term at Lehigh University .

Page1 / 2

chapter 1 - Chapter 1 Economics 01/16/08 Market- group of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online