ECON 251 1st Edition Lecture 1 Outline of Last Lecture I. NAOutline of Current Lecture I. TermsII. ScarcityCurrent LectureI. TermsEconomics: the study of rational human behavior under scarcity.Scarcity: when the resources available cannot cover the needs.II. ScarcityBecause of scarcity, people must make decisions on how to use the available resources.Decision Making Techniques:1. People face trade-offs. If they decide to use the resource for one thing, it means that they can’t use that resource for something else.2. The cost of something is what you give up to get it (also called opportunity cost; this will be discussed in further detail later on).3. Rational people thin “at the margin”. Margin meaning ‘incremental’ – people make their decisions in increments.4. People respond to incentives (cots/benefits)5. Trade can make everyone better off6. Markets are usually a good way to organize economic activity7. Governments can sometimes improve market outcomes-ECONOMY AS A WHOLE:-8. A country’s standard of living depends on its ability to produce goods and services9. Prices rise when the government prints too much money10. Society faces a short-run trade-off between inflation and unemploymentThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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