Lecture 3 Notes - Econ 101 Introduction to Microeconomics...

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  Econ 101 Introduction to Microeconomics Professor Richard V. Burkhauser 2 2 Thinking Like an Economist
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Econ 101 – Professor Burkhauser Key Concepts circular-flow diagram, p. 22 production possibilities frontier, p. 24 microeconomics, p. 27 macroeconomics, p. 27 positive statements, p. 28 normative statements, p. 28
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Figure 2.1 The Circular Flow Spending Goods and services bought Revenue Goods sold Labor, land, and capital Income = Flow of inputs and outputs = Flow of dollars Factors of production Wages, rent, and profit FIRMS •Produce and sell goods and services •Hire and use factors of production •Buy and consume goods and services •Own and sell factors of production HOUSEHOLDS •Households sell •Firms buy MARKETS FOR FACTORS OF PRODUCTION •Firms sell •Households buy MARKETS FOR GOODS AND SERVICES
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Econ 101 – Professor Burkhauser Question 2.1: Scarcity It is said that the U.S. is an “economy of scarcity”. This statement: a) is false, because the U.S. is one of the richest countries the world has ever known b) is false, because the resources that are scarce in the U.S. can
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This note was uploaded on 04/08/2008 for the course ECON 1110 taught by Professor Wissink during the Fall '06 term at Cornell University (Engineering School).

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Lecture 3 Notes - Econ 101 Introduction to Microeconomics...

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