Ch 1 Intro - 1 INTRODUCTION Econ 100A Mortimer INTRODUCTION...

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INTRODUCTION 1 Econ 100A Mortimer
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INTRODUCTION microeconomics Branch of economics that deals with the behavior of individual economic units—consumers , firms , workers , and investors—as well as the markets that these units comprise. macroeconomics Branch of economics that deals with aggregate economic variables, such as the level and growth rate of national output, interest rates, unemployment, and inflation. Econ 100A Mortimer
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TRADE-OFFS AND ECONOMIC AGENTS Consumers Workers Firms Consumers have limited incomes, which can be spent on a wide variety of goods and services, or saved for the future. Workers also face constraints and make trade-offs. First, people must decide whether and when to enter the workforce. Second, workers face trade-offs in their choice of employment. Finally, workers must sometimes decide how many hours per week they wish to work, thereby trading off labor for leisure. Firms also face limits in terms of the kinds of products that they can produce, and the resources available to produce them. Econ 100A Mortimer
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Microeconomics describes how prices are determined. In a centrally planned economy, prices are set by the government. In a market economy, prices are determined by the interactions of consumers, workers, and firms. These interactions occur in markets —collections of buyers and sellers that together determine the price of a good. PRICES AND MARKETS Econ 100A Mortimer
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KEY CONCEPTS Theories and Models In economics, we are interested in explaining observed phenomena. Explanation and prediction are based on theories . Theories are developed to explain observed
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This note was uploaded on 03/04/2010 for the course ECON 100 taught by Professor Staff during the Spring '08 term at University of California, Berkeley.

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Ch 1 Intro - 1 INTRODUCTION Econ 100A Mortimer INTRODUCTION...

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