Allocations- what we end up with
Behavior of people in a particular environment
Choices about scarce resources
The study of the choices people make in a world of scarcity.
Scarcity- the limited nature of resources
Perfect market competition was assumed
Equilibrium maximizes total surplus
Someone has the ability to control a market
When any choice someone makes aects someone on the outside.
Negative and positive c
Demand is the relationship between consumers and quantity
Between price and the quantity demanded.
As the price goes up, the quantity demanded goes down.
Dierence between demand and quantity demanded
Income, income up demand up,norma
The economic agents?
Resources needed for production
Has been or is machined
How much time a person puts into production.
Only point of stability
Welfare economics (normative)
Study of the well being of individuals
Understand both parts of a person:
Willingness to pay wtp
The maximum amount a buyer will pay for a good