Chapter 1 [Compatibility Mode]

Chapter 1 [Compatibility Mode] - individual households...

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1/6/2010 1 ECON 002 Introduction to Macroeconomics Chapter 1 • Economics • Scarcity ECON 002 Introduction to Macroeconomics Chapter 1 • Limitations force each of us to make choices • Economists study ECON 002 Introduction to Macroeconomics Scarcity and Social Choice • Society faces a scarcity of resources • Categories of resources:
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1/6/2010 2 ECON 002 Introduction to Macroeconomics Scarcity and Economics • Problems studied in economics: the scarcity of resources—and the choices it forces us to make ECON 002 Introduction to Macroeconomics Scarcity and Economics • Economists study the decisions made by households, firms, and governments to ECON 002 Introduction to Macroeconomics •A market is a group of buyers and sellers. “Organize economic activity” means Organize economic activity means determining
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1/6/2010 3 ECON 002 Introduction to Macroeconomics Microeconomics • Micro comes from the Greek word mikros, meaning “small” • Studies the behavior of
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Unformatted text preview: individual households, firms, and governments • Focuses on individual parts of an economy ECON 002 Introduction to Macroeconomics Macroeconomics • Macro comes from the Greek word makros , meaning “large” • Studies the behavior of the overall economy ECON 002 Introduction to Macroeconomics Positive and Normative Economics • Positive economics: how the economy works • Normative economics: what should be 1/6/2010 4 ECON 002 Introduction to Macroeconomics The Methods of Economics • Use economic models to develop economic theories • Economic models are built with words, diagrams, and mathematical statements • Economic models ECON 002 Introduction to Macroeconomics Economic Models: Assumptions and Conclusions • Two types of assumptions: – Critical assumptions ECON 002 Introduction to Macroeconomics Math, Jargon, and Other Concerns… • Economic jargon • Math...
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This note was uploaded on 05/25/2010 for the course ECON 2 taught by Professor Mahalingam during the Winter '10 term at UC Riverside.

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Chapter 1 [Compatibility Mode] - individual households...

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