Chapter 1 - firms and governments • Focuses on individual parts of an economy ECON 004 Principles of Economics Macroeconomics • Macro comes

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1 ECON 004 Principles of Economics Chapter 1 • Economics • Scarcity ECON 004 Principles of Economics Chapter 1 • Limitations force each of us to make choices • Economists study ECON 004 Principles of Economics Scarcity and Social Choice • Society faces a scarcity of resources • Categories of resources:
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2 ECON 004 Principles of Economics Scarcity and Economics • Problems studied in economics: the scarcity of resources—and the choices it forces us to make ECON 004 Principles of Economics Scarcity and Economics • Economists study the decisions made by households, firms, and governments to ECON 004 Principles of Economics •A market is a group of buyers and sellers. • “Organize economic activity” means determining
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3 ECON 004 Principles of Economics Microeconomics • Micro comes from the Greek word mikros, meaning “small” • Studies the behavior of individual households,
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Unformatted text preview: firms, and governments • Focuses on individual parts of an economy ECON 004 Principles of Economics Macroeconomics • Macro comes from the Greek word makros , meaning “large” • Studies the behavior of the overall economy ECON 004 Principles of Economics Positive and Normative Economics • Positive economics: how the economy works • Normative economics: what should be 4 ECON 004 Principles of Economics The Methods of Economics • Use economic models to develop economic theories • Economic models are built with words, diagrams, and mathematical statements • Economic models ECON 004 Principles of Economics Economic Models: Assumptions and Conclusions • Two types of assumptions: – Critical assumptions ECON 004 Principles of Economics Math, Jargon, and Other Concerns… • Economic jargon • Math...
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This note was uploaded on 10/15/2010 for the course ECONOMICS 2 taught by Professor Cannotremeber during the Winter '09 term at UC Riverside.

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Chapter 1 - firms and governments • Focuses on individual parts of an economy ECON 004 Principles of Economics Macroeconomics • Macro comes

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