Thursday, July 5, 2007

Econ Fundas

Few basic fundas in mircoecon

1) Trade offs - What are the benefits or losses due to an economic decision

Few scenarios - If price of a certain product is reduced do we have more buyers or fewer sellers?If minimum wage is raised, does it result in those who got less than minimum wage earlier are now getting the minimum wage or does it result in less employment opportunity?

2) Price - Price is a rationing device. Since resources are limited, price helps us in decisions wrt to allocating the limited resources.

3) Markets

4) Opportunity Cost

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