2 Class Notes - Correlation two things that are together...

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Eco- September 3, 2009 Self interest- what you think you need to survive Whats specialization why impt Incentives Central question in eco- dealing with scarcity, choice and opportunity cost Command- govt controls all means of production market economy- market free to operate on peoples wants and needs Purpose of circular flow model- see how money moves throughout the market CHAPTER 1 Economics - study of allocating our resources to satisfy as many wants as possible Rational behavior pg 9- people do the best they can with what they have for their wants/ needs Imperial analysis - able to prove it mathematically Ceterus paraphus - holding all things constant Microeconomics - looking at everything with viewpoint of a family, person, company ect Macroeconomics - typically splits up geographically. i.e. country, nation, west half, Aggregate - total
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Unformatted text preview: Correlation- two things that are together, just seems to happen. (i.e. everytime I get my car washed it rains) Causation- One thing causes another Fallacy of composition- everyone would be doing this, but not CHAPTER 2 Stuff satisfies our wants and resources make the stuff **Four basic resources: Resource Payment 1. Land- Rent a. anything you can dig, pump or grows out of the ground. i.e. iron, coal, tin, trees, oil, natural gas, water, shrimping in the gulf ect. 2. Labor-Wages a. human effort. Physical, mental labor-using your brain 3. Capital-Interest 4. Entrepreneurship-Profit Opportunity Cost- value of the next best thing that you could have gotten 2.3 Marginal Rule of rational choice Net benefit 2.4 incentives Eco- September 3, 2009 2.5 specialization-a dvant ag es-co mp ar ative a dv ant ag es...
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