ECON 110 Microeconomics Chapter 2 Notes
ECON 110 Microeconomics Chapter 2 Notes ECON 110
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This 2 page Class Notes was uploaded by Lauren Heller on Thursday January 14, 2016. The Class Notes belongs to ECON 110 at University of Alabama - Tuscaloosa taught by Dr. Harold elder in Summer 2015. Since its upload, it has received 37 views. For similar materials see Principles of Economics in Economcs at University of Alabama - Tuscaloosa.
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Date Created: 01/14/16
Micro- Chapter 2 Notes Production possibilities frontier- a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology Points B, D, C are possible and efficient Point A is possible and inefficient Point X is not possible Microeconomic – study of how households and firms make decisions and how they interact in a specific market Macroeconomics- study of the economy wide phenomena Ex. Inflation, unemployment, economic growth Normative statement- makes a claim of how the world ought to be Positive statement- makes a claim how the world is Opportunity cost- the cost of something is what you give up to get it Economic model is a simplified representation of some aspect of the economy Circular Flow Model Roles in the circular flow model Market for goods and services Firms sell finished products Households buy finished products Market for Factors of Production Households sell labor, capital, land etc. Firms buy labor, capital, land, etc. Firms Produce and sell goods and services Hire and use factors of production Households Buy and consume goods and services Own and sell factors or production Why economists disagree… Difference in scientific judgment Have different hunches about the validity of alternate theories Differences in values
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