Econ - Final Exam Outline

Econ - Final Exam Outline - Exam 1 The Nature of Economics:...

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Exam 1 The Nature of Economics: Microeconomics – Focus on “the individual parts of the economy” - Analysis is usually of a single product market or of groups of people acting w/ a common economic purpose (eg, buyers of a particular good) Macroeconomics – Looks not at any particular part of economy, but rather the “economy as a whole”. - Add up microeconomics parts to come up w/ overall picture. Principles of economics 1. Nearly everything happens for a reason. 2. The acts of production, exchange, and consumption are the result of individual choices. 3. Every choice is a tradeoff. 4. The cost of something is the value to you of what you must do without. 5. Decision making takes place at the margin. 6. Incentives influence our behavior and choices. 7. Voluntary exchange makes everyone better off. 8. Markets are an efficient way to organize economic activity. 9. Sometimes government (non-market) action is necessary to improve market outcomes. Working with graphs - Just because it’s a graph does not mean is mathematical. The Economizing Problem and The Production Possibilities Curve: Scarcity – Limited availability of things that we desire (not to be confused w/ shortage) Production Possibilities Curve
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This note was uploaded on 04/07/2008 for the course ECON 151 taught by Professor Harris during the Fall '07 term at University of Delaware.

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Econ - Final Exam Outline - Exam 1 The Nature of Economics:...

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