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2004chapter1 - Dr Duffy Microeconomics Notes from CHAPTER 1...

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Dr. Duffy Microeconomics Notes from CHAPTER 1
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What is economics? Economics is a social science. Social sciences deal with people and the  institutions they create. Economics deals with how people make  decisions to allocate resources to achieve  their goals.
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Economics Economics has been called the “science of scarcity,” because many economic problems deal with constraints. There are so many hours in the day, which must be allocated to competing ends (work, study, sleep, recreation). There are so many dollars in a wallet, which must be allocated to competing products (chips, burgers, toothpaste, lettuce, books, music, etc.) So goods are limited, but people are assumed to have "unlimited wants." (More is preferred to less for most things.)
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Economics and Values Economics is not a substitute for ethics. We assume in economics that people are frequently  motivated by self-interest. Many people are concerned about others, even  strangers. The degree of self-interest/altruism varies from  person to person, based on disposition, up- bringing, and experience. We use our models because they work in general.   Some degree of self-interest does motivate most  people.
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Why Study Economics? Understand government policy. Understand global markets. Concern about people in poverty. Be more competitive on the job market. Invest wisely. Make better decisions.
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Microeconomics . . . is the branch of economics that deals with the behavior of individual entities, such as consumers, firms, households, or markets. A major focus of microeconomics is price determination. This course deals primarily with Microeconomics.
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The Other Branch of Economics . . . is macroeconomics, which is concerned with overall performance of the economy, e.g. inflation, unemployment, growth. Macroeconomics is the more recent of the two branches. It began around 1935, when John Maynard Keynes published General Theory of Employment, Interest, and Money .
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Economics . . .
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