ECON 2301 chap 1

Market

An arrangement or institution that brings buyers and sellers of a good or service together

According to the rationality assumption,

People do not intentionally make decisions that would leave them worse off

The principle of opportunity cost evolves from the concept of

Scarcity

Invention

The development of a new good

Natural resources

The resources provided by nature and used to produce goods and services

Physical capital

The stock of computers, factory buildings and machine tools used to produce goods

Economics

concerned with how people respond to incentives.

One of the first steps in deciding whether to complete your education is to

evaluate the marginal cost and marginal benefit of that decision

Economists believe that an individual or firm should continue any activity until... .

marginal benefit is equal to marginal cost

Centrally planned economy

the government decides how economic resources will be allocated