Lecture19

Lecture19 - 1 Econ 1 Winter 2008 RATIKA NARAG Ph.D ADMIN...

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Unformatted text preview: 1 Econ 1, Winter 2008 RATIKA NARAG, Ph.D. ADMIN FINAL: March 21, 2008, 8 – 11 am If your Last/Family Name starts with A-L: Dodd 147 If your Last/Family Name starts with M-Z: Rolfe 1200 ADMIN Grading Policy: Final and Midterm account for 50% of your grade (as specified in the Syllabus) Final will have more questions and total points Make sure to be in the respective classrooms on time as no extra time will be given to anyone ADMIN Bring a SCANTRON and soft lead pencil for multiple choice questions Pen is needed for the short/essay questions Office hours today (03/13/08): 9:15 – 10:15 am (Bunche 2250B) Extra office hours on 03/14: 8 – 10 am (Bunche 2250B) Feedback Forms: 180-004-200 REVIEW Chapter 1: – Resources are scarce – Opportunity cost: The real cost of something is what you must give up to get it – “How much?” is a decision at the margin – People exploit opportunities to make themselves better off – Gains from trade – Markets move towards equilibrium – Markets usually lead to efficiency – Government intervention REVIEW Production: Process that transforms scarce resources into useful goods and services – Factors of Production: 1. Land 2. Labor 3. Capital 4. Human Capital 2 REVIEW Methods of Economics – Positive economics: studies economic behavior without making judgments; Describes what exists & how it works – Normative economics: analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action REVIEW Production Possibilities Frontier (PPF): – Max amount of a good/service that can be produced given the production of other goods/services – PPF curve has a (-) slope trade-off between producing one good or another – Constant Opportunity cost: Straight PPF REVIEW Correlation vs. Causation – Correlation: 2 variables may move together; do not cause changes in each other – Causation: cause/effect relationship; changes in X cause changes in Y REVIEW A producer has an absolute advantage in the production of a good/service if it can produce using fewer resources A producer has a comparative advantage in the production of a good/service if it can produce it at a lower opportunity cost REVIEW Law of Demand – Ceteris paribus, as prices rise, quantity demanded falls – Ceteris paribus assumption – Inverse relationship between price and quantity REVIEW Shifts vs. Movement Along the Curve – Shift: change in the quantity demanded at any given price – Movement along the curve: change in the quantity demanded of a good/service resulting from a change in its price 2 REVIEW Methods of Economics – Positive economics: studies economic behavior without making judgments; Describes what exists & how it works – Normative economics: analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action REVIEW Production Possibilities Frontier (PPF): – Max amount of a good/service that can be produced given the production of other goods/services...
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This note was uploaded on 04/16/2008 for the course ECON 1 taught by Professor Nagata during the Winter '08 term at UCLA.

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Lecture19 - 1 Econ 1 Winter 2008 RATIKA NARAG Ph.D ADMIN...

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