econ 211 lecture 1

econ 211 lecture 1 - Econ 211 Lecture 1 Patrick McLaughlin...

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Econ 211 Lecture 1 Patrick McLaughlin Scarcity -TANSTAAFL: There ain’t no such thing as a free lunch. (Robert Heinlein, The Moon is a Harsh Mistress , great book, highly recommended) -Nullum gratuitum prandium Scarce good (economic good) – something must be given up to obtain it. i.e. choices must be made. E.g.: Seats in my Econ 211 class are scarce. More people wanted in than could physically fit in the room. This scarcity results in a conflict between individuals (economic agents). The process that resolves these conflicts is competition. In the case of seats, the competition has multiple levels: seniority and time-cost. Conflict resolution leads to discrimination (choices). Choices cost opportunity cost Opportunity cost – the highest valued foregone alternative, or the “best thing given up.” NOT ALL THINGS GIVEN UP, just the best one. Economics is the study of the choices people make in the presence of scarcity. Microeconomics – study of choices that individuals and firms make. Example of applied microeconomics: if the government raises the tax rate on cigarettes, will that have any effect on the quantity of cigarettes consumed by individuals, and how much? Why are people getting married at a later age than in the 20 th century? Macroeconomics – study of the performance of national economies.
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econ 211 lecture 1 - Econ 211 Lecture 1 Patrick McLaughlin...

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