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lectures1to10

lectures1to10 - LECTURE 1 Introduction Instructor Ratika...

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1 Econ 1, Winter 2008 RATIKA NARAG, Ph.D. LECTURE 1: Introduction Instructor: Ratika Narag, PhD Lecture: T,TH: 8-9:15 am, DODD 147 Office Hours: F: noon-2 pm, Bunche 2265 Exams: Midterm (Feb 07, 2008) Final (Mar 21, 2008) LECTURE 1: Admin TAs: Roberto Jael, Corey Garriot, Neil Lessem, Tin Liu, Aravind Moorthy, Se Yan Enrollment/Grading Tips on Succeeding in Econ 1 Course Website (http://www.sscnet.ucla.edu/08W/econ1-1) LECTURE 1: Admin (cont.) Lectures and Discussion Sessions Problem Sets Re-Grade Requests Extra Problems and Practice Questions LECTURE 1: Chap 1 What is Economics? – Not the study of “Money” – Not Mathematics – Is about individual choice – Is fundamentally about choices made with scare resources or resource constraints LECTURE 1: Chap 1 Microeconomics vs. Macroeconomics Microeconomics: examines the behavior of individual decision-making units—i.e., business firms and households Macroeconomics: examines the behavior of economic aggregates — income, output, employment, etc. on a national scale
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2 LECTURE 1: Chap 1 Three Fundamental Concepts: – Opportunity Cost – Marginal Analysis – Efficient Markets LECTURE 1: Chap 1 Opportunity Cost : – The real cost of an item is its opportunity cost – What you must give up in order to get something – It does not have to be just monetary cost – Nearly all decisions involve a trade-off – There is no “free lunch” LECTURE 1: Chap 1 Example: Donald Trump offers you one of the following items, free of charge: – Sandwich – Beach house in Malibu What is the “cost” of the sandwich? LECTURE 1: Chap 1 Scarcity Choice Opportunity Cost Fundamental Economic Problem Unlimited wants vs. Limited Resources Demands > Supplies Scarcities LECTURE 1: Chap 1 Marginal Analysis: Balancing marginal benefit with marginal cost – Key to deciding “how much” of an activity to do –The analysis of the benefits and costs of the marginal unit of a good or input – Marginal = the next unit LECTURE 1: Chap 1 Outline: 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
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1 Econ 1, Winter 2008 RATIKA NARAG, Ph.D. RECAP OF LECTURE1 What is Economics? – Fundamentally about choices made with scarce resources or resource constraints – Opportunity Cost; trade-off – Scarcity Choice Opportunity Cost RECAP OF LECTURE 1 Scarcity, Choice, and Opportunity Cost Human wants are unlimited, but resources are not Three basic questions to answer: 1. What gets produced? 2. How is it produced? 3. Who gets what is produced?
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