LectureSlides_Chapter1 - ECON 306: Intermediate...

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CON 306 ECON 306: Intermediate Microeconomics Professor Anita Alves PENA Preliminaries – P&R Chapter 1 1
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Introduction { What are the key themes of microeconomics? { What is a market? { What is the difference between real and nominal prices? 2
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Themes of Microeconomics { Microeconomics deals with limits z Limited budgets z Limited time z Limited ability to produce { How do we allocate scarce resources? 3
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Themes of Microeconomics { Workers, firms and consumers make trade-offs z Do I work or go on vacation? z Do I purchase a new car or save oney? money? z Do we hire more workers or buy new machinery? { How are trade-offs best made? 4
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Theories and Models { Economics is concerned with explanation of observed phenomena heories sed to explain observed z Theories used to explain observed phenomena in terms of a set of basic rules and assumptions: { Consumer Theory { Producer Theory z Theories used to make predictions { Models are mathematical representations used to make quantitative predictions 5
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Themes of Microeconomics { Consumers z Limited incomes z Consumer Theory – describes how consumers maximize their well-being, sing their preferences, to make using their preferences, to make decisions about trade-offs z How do consumers make decisions about consumption and savings? 6
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Themes of Microeconomics { Workers z Individuals decide when and if to enter orkforce workforce { Trade-offs of working now or obtaining
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This note was uploaded on 05/30/2010 for the course ECON ECON306 taught by Professor Bee during the Summer '10 term at École Normale Supérieure.

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LectureSlides_Chapter1 - ECON 306: Intermediate...

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