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ECON 313-chap1.note

ECON 313-chap1.note - ECON 313 Chapter1 Over 40 of the...

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ECON 313 Chapter1. - Over 40% of the world’s population lives in poverty. - Poor rural areas: ex. “extended” family o Have a combined real per capita annual income o Live in one- or two-room houses o Children get only primary education o Adults are illiterate o One or two meals per day o Sickness occur often o Qualified doctors and medical practitioners are far away o Subsistence economy: food, clothing, shelter, goods are made and consumed by the people themselves, so little money - Development process: constructing new road, improved medical care, information about the world outside, modern civilization - Developed nation: people become increasingly interdependent - Economic interdependence steadily rows: loss of tropical forests due to global warming, new diseases spreading out because of increased human mobility. - Traditional economics: concerned with the efficient, least-cost allocation of scarce productive resources and with optimal growth of these resources over time so as to produce an ever-expanding range of goods and services. - Traditional neoclassical economics deals with an advanced capitalist world of perfect markets; consumer sovereignty, automatic price adjustments, decisions made on the
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basis of marginal, private-profit, utility calculations, equilibrium outcomes in all product and resource markets. - Political economy: concerned with the relationship between politics and economics, with special emphasis on the role of power in economic decision making. - Development economics : concerned with the efficient allocation of existing scarce (idle) productive resources and with their sustained growth over time, it also deals with economic, social, political, and institutional mechanisms (both public and private)- rapid, large-scale improvements - More developed countries (MDCs), less developed countries (LDCs) - Most commodity and resource markets are highly imperfect - Consumers and producers have limited information - Major structural changes are taking place in both and society and the economy - Potential for multiple equilibria rather than a single equilibrium are common - Disequilibrium situation often prevail (price do not equate supply and demand)
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ECON 313-chap1.note - ECON 313 Chapter1 Over 40 of the...

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