Econ100A_lecture1

Econ100A_lecture1 - Econ 100 A: Intermediate Microeconomics...

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Econ 100 A: Intermediate Microeconomics Linda Cohen Professor of Economics and Law UC Irvine
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What is intermediate microeconomics? Microeconomics studies how households and firms make decisions to allocate limited resources. Microeconomics examines how these decisions affect the supply and demand for goods and services, which determines prices; and how prices determine the quantity supplied and quantity demanded of goods and services. Microeconomics analyzes market mechanisms that establish relative prices among goods and services and the allocation of limited resources among many alternative uses. Microeconomics analyzes market failure : where markets fail to produce efficient results. (adapted from Wikipedia)
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Review of concepts Positive and normative analysis Markets and economics Supply, demand and prices Real and nominal prices
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Positive and normative economic analysis Gasoline rationing (allocating to each individual a maximum amount of gasoline that can be purchased each year) is a poor social policy because it interferes with the workings of the
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Econ100A_lecture1 - Econ 100 A: Intermediate Microeconomics...

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