Econ 281 Chapter1 - Econ 281 Intermediate Microeconomics...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 281 Intermediate Microeconomics Consumer Behavior Theory of Production and Cost Various Market Structures Lorne Priemaza, M.A. Lorne.priemaza@ualberta.ca Various material courtesy of Katharine Rockette and Wiley & Sons INC.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 1 What is economics? Microeconomics and Macroeconomics Optimization Positive and Normative Analysis
Background image of page 2
What Is Economics? Economics is the science that deals  with the allocation of limited resources  to satisfy unlimited wants. Limited Resources Choice s Unlimited Wants Outcome
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Microeconomics and Macroeconomics Microeconomics -from the Greek  mikros  meaning small -studies economic behavior of individual  decision makers (people, firms, etc.) -What price should Mike’s Melons set? -How much  House  should Kim watch? -How does eating melons while watching  House  affect Jon’s utility?
Background image of page 4
Microeconomics and Macroeconomics Macroeconomics -from the Greek  makros  meaning large -studies aggregate economic behavior  (nation, world, business cycles, etc.) -What should the tax on melons be? -How do tv shows such as  House  affect  productivity and unemployment? -How does melon and tv demand  fluctuate?
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Economics and Models “Economists do it with models.” -Life is too complicated for an economist  to analyze all at once -In order to analyze one aspect of life,  economists build a simplified model to  represent that aspect of life -The results of the model are then tested  against real life -Models require assumptions
Background image of page 6
Economics and Assumptions “Assume there’s a can opener!” -Every economic model relies on  assumptions (much like a house relies  on foundations) -ie: Assume people are rational;  assume firm A understands people’s  tastes -If the assumptions are invalid, the model  suffers
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Exogenous and Endogenous  Variables Exogenous Variables
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 26

Econ 281 Chapter1 - Econ 281 Intermediate Microeconomics...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online