ch01 - MICROECONOMICS Theory Applications Chapter 1...

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1 MICROECONOMICS: Theory & Applications Hamid E Ali Spring 2011 Chapter 1: Microeconomics: An Introduction
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2 Learning Objectives Convey the scope of microeconomic theory and explain why theory, in general, is essential to understanding and predicting real-world outcomes. Distinguish between positive and normative analysis. Differentiate between real and nominal prices. Introduce the concept of opportunity cost and explain how economic costs differ from accounting costs. Show how a production possibility frontier graphically depicts the basic assumptions economists make about market actors as well as the concept of opportunity cost.
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3 The Scope of Microeconomic Theory “micro-” derives from the Greek word “mikros-” focuses on the behavior of individuals as fundamental decision makers in a society also referred to as “price theory”
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4 The Nature and Role of Theory A theory shows how facts are related to one another. Theory is based on certain assumptions.
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This note was uploaded on 04/07/2011 for the course MPPA 503 taught by Professor Selim,tarek during the Spring '11 term at American University in Cairo.

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ch01 - MICROECONOMICS Theory Applications Chapter 1...

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