Econ 205 - Midterm 1 Review

Econ 205 - Midterm 1 Review - Chang 1 Econ 205 Midterm I...

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Chang 1 Econ 205 Midterm I Review Chapter 1 What is economics? Economics is the study of the allocation of scarce resources to satisfy unlimited wants. It is about how people make choices. Resources are the things used to produce consumer goods Wants are what people would buy if they had unlimited income What is microeconomics? Microeconomics is the study of one unit of the economy Deals with effects of changes in price Examines the effects of new taxes on a specific product 4 Markets – Competition, Monopoly, Monopolistic Competition, and Oligopoly What is macroeconomics? Macroeconomics is the study of the economy as a whole Deals with aggregates, or totals, like total output in an economy Changes in unemployment General price level National income Rate of interest Trade Fiscal and monetary policy What is an Economic theory? It is a simplified representation of the real world used as the basis for explanations Employs methods of mathematics, statistics, econometrics, and graphs
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Econ 205 - Midterm 1 Review - Chang 1 Econ 205 Midterm I...

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