lecture1 - Definitions Chapter 1 Microeconomics...

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Copyright © 2000 by Linda Wong 1 Chapter 1 Microeconomics Definitions Economics – the study of how resources are allocated among alternative uses to satisfy human wants Definitions Microeconomics – the study of the behavior of individual economic units, for example: • consumers • firms • owners of resources Definitions Macroeconomics – the study of the behavior of economic aggregates (gross domestic product, or unemployment) Examples of Problems Solved by Microeconomics 1) Optimal Production Decisions – How to meet product objectives at least cost, for example. – It follows that different objectives can mean different decisions. Another Example of Problems Solved by Microeconomics 2) Pricing Policy – The price that can be charged depends upon the characteristics of specific marketplaces. – It follows that the price of some good or service need not be the same everywhere.
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Copyright © 2000 by Linda Wong 2 Another Example 3) Efficient Allocation of Resources – Allocation issues take broader perspectives that extend across many individuals. – Efficiency means that resources are not wasted.
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lecture1 - Definitions Chapter 1 Microeconomics...

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