Lectureslides1 - LECTURE 1: Introduction Instructor: Ratika...

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Unformatted text preview: LECTURE 1: Introduction Instructor: Ratika Narag, PhD Econ 1, Winter 2008 RATIKA NARAG, Ph.D. 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 LECTURE 1: Admin (cont.) Lectures and Discussion Sessions Problem Sets Re-Grade Requests Tips on Succeeding in Econ 1 Extra Problems and Practice Questions Course Website (http://www.sscnet.ucla.edu/08W/econ1-1) 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 1 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 LECTURE 1: Chap 1 Scarcity Choice Opportunity Cost Fundamental Economic Problem Unlimited wants Demands vs. Limited Resources Scarcities What is the "cost" of the sandwich? > Supplies LECTURE 1: Chap 1 Marginal Analysis: Balancing marginal benefit with 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 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 2 ...
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This note was uploaded on 03/20/2008 for the course ECON 1 taught by Professor Nagata during the Fall '08 term at UCLA.

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