Econ306- chapter 1 outline

Econ306- chapter 1 outline - CHAPTER 1 ECON306...

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CHAPTER 1 ECON306 Microeconomics Deals with the behavior of individual economic units (including consumers, workers, investors, owners of land, business firms, or any individual that plays a role in the functioning of our economy). It explains how and why these units make economic decisions. Concerns how economic units interact to form larger units (including markets and industries) Macroeconomics Deals with aggregate economic quantities, such as the level and growth rate of national output, interest rates, unemployment, and inflation. Also involves the analysis of markets, similar to microeconomics Themes of Microeconomics Making the most of limits put on people’s spending, time, labor, etc. Allocation of scarce resources Trade-Offs Microeconomics describes the trade-offs that consumers, workers and firms face, and shows how these trade-offs are best made. Consumer Theory describes how consumers, based on their preferences, maximize their well-being by trading off the purchase of more of some goods for the purchase of less of others. Theory of the firm
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This note was uploaded on 11/16/2010 for the course ECON 306 taught by Professor Cramton during the Spring '06 term at Maryland.

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Econ306- chapter 1 outline - CHAPTER 1 ECON306...

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