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Econ Notes 1 - I Definitions a Microeconomics studies the...

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I. Economics studies how society decides: a. What to produce? b. How MUCH to produce? c. How to produce? i. Which resources to use? 1. Eg. Use many unskilled workers with shovels, OR use a few skilled workers with bulldozers. ii. What technology to use? 1. Eg. Nuclear energy vs. solar energy iii. What are work conditions like? 1. Safe and healthy vs. hazardous d. For whom to produce? Who will benefit? i. Who gets the benefits of the production? 1. The degree to which different groups in society benefit e. How do you motivate workers? I. Economics has 2 main branches a. Microeconomics (Econ 202) i. Micro=small ii. Looks at decision making by individual businesses and households. 1. Eg. What price to charge 2. Eg. How much to save and how much to spend iii. Looks at the tree as opposed to the forest the tree resides in. b. Macroeconomics (Econ 201) i. Macro=large ii. Looks at the big picture - how all the different businesses and households are combined and interact. iii. Looks at the forest instead of just the singular tree.
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Unformatted text preview: I. Definitions a. Microeconomics studies the allocation of scarce resources among alternative uses. i. Resources include time, money, labor force, energy, land, machinery and equipment, ect. b. Macroeconomics studies the determination of the level of economic activity and its consequences. i. Such as recession, unemployment, and growth I. Why do economists disagree often? a. Can't perform controlled laboratory experiments i. Eg. Tax cut ii. We CAN do computer simulations but the computer models differ. b. Economic data = statistical information about the economy. i. However, data may not be available, or may not be reliable. 1. Economists don't gather their data themselves, they rely on the government because they can't afford to. c. Political opinions differ. d. Value judgments differ. i. Eg. Whats worse, unemployment or inflation? e. Who pays them? i. Who do they work for?...
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Econ Notes 1 - I Definitions a Microeconomics studies the...

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