ECON 111 NOTES - ECON 111 NOTES DAY 1 GOAL OF ECONOMICS IS...

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ECON 111 NOTES: DAY 1 GOAL OF ECONOMICS IS TO BE EFFICIENT I. What is Economics - Study of how businesses & people make decisions - Social science - Study of how choices are made in a scarce world II. Micro v. Macro - Macro looks at the economy as a whole, micro just looks at markets III. Why Study Economics 1) To understand how markets work (from a business standpoint) 2) To have more informed voters (in a democracy) 3) To learn/think like an economist 4) Study of political science is…..POWER IV. Economics as Social Science A. Goal B. Assumptions C. Models D. Causation v. Correlation E. Positive v. Normative DAY 2 I. Why Study Econ? A. Understand markets B. Be an informed voter C. To think like an Economist D. Better global perspective 1) US has 5% of world population 2) US poverty level is @ 14-15% 3) UN poverty level is under $2.00 a day, between 15-18% II. Economics as a Social Science A. Goal- Efficiency 1) What you produce 2) How much you produce 3) How to distribute the product
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Unformatted text preview: B. Assumptions 1) Human beings are self-interested utility maximizers C. Models 1) A simplification of the real world to help us understand the concept that then helps us understand the real world D. Causation v. Correlation 1) Causation is 2) Correlation are two variables/events that seem to happen in rhythm with one another E. Positive v. Normative 1) Positive 2) Normative is based on opinion III. History of Economic Thought A. Pre- Mercantalism B. Mercantilism 1) 1550- 1750 2) How to increase the wealth of the nation? 1) Export, Don't import 2) Conquer Territory 3) Enslave C. Critics of Mercantilism 1) Thomas Mun 2) David Hume 3) Adam Smith D. Adam Smith (The Wealth of Nations) 1) Assumptions re. Human Nature 2) The Invisible Hand 3) Division of Labor 4)Proper rule of Govt. a. Governments job to provide National Defense b. “ Laws/ Judicial System c. “ Public Goods d. “ Basic level of Education...
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