lectures1to10

lectures1to10 - 1 Econ 1, Winter 2008 RATIKA NARAG, Ph.D....

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Unformatted text preview: 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 unitsi.e., business firms and households Macroeconomics: examines the behavior of economic aggregates income, output, employment, etc. on a national scale 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 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?...
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lectures1to10 - 1 Econ 1, Winter 2008 RATIKA NARAG, Ph.D....

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