Notes-01_and_02_Market_Budget-2 - Econ 3130, Spring 2012,...

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Econ 3130, Spring 2012, R. Masson Chapters 1 and 2: p. 1 Chapters 1 and 2: The Market and The Budget Constraint I. Intro to Econ A. Much of Chapter 1 should be redundant to material covered in Econ 1010 and I will accordingly do very little with this chapter, in particular I will not look at apartment prices or simplistic supply and demand comparative statics. B. Chapter 1 is a stepping off point for how this text (and hence lectures) is organized 1. Topics include a. The Demand Curve Chapters 6 and 15 b. The Supply Curve Chapters 16, 22 and 23 c. Competitive Equilibrium Chapters 16 and 23 d. Monopolist Chapter 24 e. Discriminating Monopolist Chapter 25 f. General Equilibrium and Pareto Efficiency Chapters 31 and 36 2. The text layers knowledge a. Assumes some 1010 knowledge on a topic b. Builds on that some c. Departs to another topic d. Comes back to build upon the original topic even more later II. Models A. Models are abstract ways of characterizing the world 1. Like a Map, they abstract from a great deal of detail to permit useful simple representations of relevant material a. Suppose I went to the book store to get a map of the Finger Lakes Region and asked the sales person for “a map.” I should expect to be asked (1) Do you want to have a map listing the wineries? The bicycle paths? Hiking
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Econ 3130, Spring 2012, R. Masson Chapters 1 and 2: p. 2 trails? Including the details of dirt roads through the national forests? A map showing only cities and the major roads between them? An ariel photo map (like one you can get on google)? b. The relevant material may vary by purpose, and the level of abstraction c. Getting to NY City, depending upon where you want to be, which tunnels or bridges do you want? If going to Battery Park City, I use the Pulaski Skyway which is non-obvious on many maps 2. From Wikipedia: “The gravity of Earth, denoted g, refers to the acceleration that the Earth imparts to objects on or near its surface. In SI units this acceleration is measured in metres per second per second (in symbols, m/s2 or m ± s-2) or in newtons per kilogram (N/kg or N ± kg-1). It has an approximate value of 9.81 m/s2, which means that, ignoring air resistance, the speed of an object falling freely near the Earth's surface increases by about 9.81 metres per second every second. This quantity is informally known as little g (contrasted with G, the gravitational constant, known as big G).” a. An abstract model which, as noted, ignores air resistance (and location too) (1) For parachuting though, you want to know about terminal velocity (2) Although how a parachute works is a matter of physics, parachute design is a matter of something like engineering along with art, trials (and, unfortunately some errors). III.
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Notes-01_and_02_Market_Budget-2 - Econ 3130, Spring 2012,...

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