Economics-study of how society manages its scarce resources; behavioral science
-study how human beings coordinate their wants and desires, given the decision
making mechanisms, social customs, and political realities of the society
C. Inflation and Inflation Rates
1. Definition: This is when there is too many jobs available. Inflation rate is is a
measure of the rate of change in the aggregate (total) price (price of goods and services)
level. We are measuring how
Growth and Cycles
A. Economic Growth- We collect data to observe the macro economy.
1. Definition- An economy is said to be growing if it is producing more stuff
(goods and services) in one period than in the previous period (more economic activity).
Equal and Unequal Markets
Market Equilibrium and Disequilibrium
Equilibrium: quantity supplied = quantity demanded
o Means no incentive to change behavior
o Market is in equilibrium if the suspected participants neither have an incentive to
Economies and Economics
Economics is the study of how societies provision themselves with the
material means of existence
By material means, not only talking about physical stuff, but
about services as well
o What? How? For Who
Productions and Trends
-Production possibility curve (PPC)
-The functions of PPC
-Shifts in the PPC
Example: A Production Possibilities Curve for an Individual
-A two decrease in history is the opportunity cost but three point increase in economics.
Opportunity Cost Application: International Trade
Questions to answer true positive statements
o If workers in the United States are the most productive in the world, why do
we consumer so many imported goods?
It isnt productivity that matters and becau