KW2_Micro_Ch01(1)-3

KW2_Micro_Ch01(1)-3 - Economics 101: Introduction What is...

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1 of 29 Economics 101: Introduction What is “economics?” A social science that deals with the production and distribution and consumption of goods and services and their management (text and wikipedia have similar definitions) examines how people choose to use limited or scarce resources in attempting to satisfy their unlimited wants. The term economics comes from the Ancient Greek ο κονομία ( oikonomia, "management of a household, administration“) ο κος ( oikos, "house") + νόμος ( nomos, "custom" or "law"), hence "rules of the house(hold)".
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2 of 29 Micro vs. Macro Microeconomics studies the behavior of basic elements in the economy, including individual markets and agents (such as consumers and firms, buyers and sellers), and Macroeconomics addresses issues affecting an entire economy, including unemployment, inflation, economic growth, and monetary and fiscal policy.
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3 of 29 chapter: 1 >> Krugman/Wells First Principles Edited by C. Kling
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4 of 29 WHAT YOU WILL LEARN IN THIS CHAPTER A set of principles for understanding the economics of how individuals make choices A set of principles for understanding how individual choices interact A set of principles for understanding economy-wide interactions
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5 of 29 WHAT YOU WILL LEARN IN THIS CHAPTER Overview of some key principles in economics and some terminology Principles and Concepts Scarcity Opportunity Cost Marginal Analysis Gains from trade Equilibrium in markets Efficiency and equity Market failure and government intervention Economy wide interactions
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6 of 29 Individual Choice Individual choice is the decision by an individual of what to do, which necessarily involves a decision of what not to do. Basic principles behind the individual choices: 1. Resources are scarce. 2.
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This note was uploaded on 09/30/2011 for the course ECON 101 taught by Professor Brentkreider during the Fall '07 term at Iowa State.

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KW2_Micro_Ch01(1)-3 - Economics 101: Introduction What is...

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