intro - ECONOMICS 201 INTRODUCTION TO MICROECONOMICS Spring...

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Introduction slide 1 ECONOMICS 201 INTRODUCTION TO MICROECONOMICS Spring 2001
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Introduction slide 2 ECONOMICS IS ABOUT DECIDING Economists do not restrict themselves to considering only decision problems involving money and markets, though that is a big part of economics.
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Introduction slide 3 EXAMPLES OF SOME DECISIONS ECONOMISTS HAVE ANALYZED Whether to buy a car this week. Whether to have pizza for dinner tonight, or something else. Whether to marry your sweetheart. How hard to study for this course. Whether to go to college, and if so, which one. Whether to buy a lottery ticket in the Michigan lottery.
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Introduction slide 4 Factors in decision making 1. People face tradeoffs. 2. Opportunity cost. 3. Making decisions at the margin. 4. People respond to incentives.
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Introduction slide 5 How individual decisions affect others 5. Trade (exchange) can benefit everyone. 6. Markets are often a good way to organize exchange. 7. Government can sometimes improve on markets.
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Introduction slide 6 MICROECONOMIC AGENTS Firms Produce and sell goods and services Consumers Buy goods and services Sell inputs (labor services, loanable funds)
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Introduction slide 7 Methodology: Positive v. Normative Economics Positive econ. -- Studies the way the world is. How much will a new gasoline tax raise the price of gasoline? Will an increase in the minimum wage increase unemployment? Why is the price of corn $4.20 per bushel? How much will a drought in the corn belt raise the price of corn? Of wheat? What will be the effect on Byron Brown’s pizza consumption if we take $1000 away from Tom Izzo and give it to Brown?
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Introduction slide 8 Normative econ. -- Studies the way the world should be. Should there be a new tax on gasoline?
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This note was uploaded on 01/05/2012 for the course ECON 201 taught by Professor Brown during the Winter '12 term at BYU.

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intro - ECONOMICS 201 INTRODUCTION TO MICROECONOMICS Spring...

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