New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Chapter 1 Ten Principles of MacroEconomis

by: Roger D.

Chapter 1 Ten Principles of MacroEconomis Econ 202 - 01

Marketplace > University of North Dakota > Economcs > Econ 202 - 01 > Chapter 1 Ten Principles of MacroEconomis
Roger D.
GPA 4.0

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These typed notes are from the very first week of class. They are only 2 pages long. They will save you study-time when its time to study for finals.
Principles Of Macroeconomics
Kwan Yong Lee
Class Notes
brief, Principles, Macroeconomics, Macro, Economics, n, gregory, mankiw, textbook, 7th, edition, notes, study, guide, test, final, finals, 10, Ten
25 ?




Popular in Principles Of Macroeconomics

Popular in Economcs

This 2 page Class Notes was uploaded by Roger D. on Friday April 8, 2016. The Class Notes belongs to Econ 202 - 01 at University of North Dakota taught by Kwan Yong Lee in Spring 2016. Since its upload, it has received 10 views. For similar materials see Principles Of Macroeconomics in Economcs at University of North Dakota.

Similar to Econ 202 - 01 at UND


Reviews for Chapter 1 Ten Principles of MacroEconomis


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 04/08/16
Econ 202 ~ Chapter 1 ~ 10 Principles of Marco-Economics HOW PEOPLE MAKE DECISIONS 1. People face trade-offs ~ because resources are scarce between alternative items, choices are necessary  Trade-offs between efficiency & equality when grouped into a society  Asks: “What” or “which” to do? 2. The true cost of something is what you give up to get it ~ it’s measured in forgone opportunity costs.  Measuring the costs and benefits of giving up something else for an item 3. Rational people think at the margin ~ is decision-making at the edge or at a limit  Intuitively comparing marginal benefits to marginal costs  Asks: “How much of” is a decision at the margin  At the “edge” is measured in one (1) unit  When MB > MC ~ Take Action / When MB < MC ~ Don’t Take Action 4. People respond to incentives ~ induces a person to act (effect & change behavior)  People exploit opportunities to make themselves better off  Something that induces a person to act via a reward or punishment Efficiency ~ is when society gets its most out of its scarce resources. (Size of the pie) Equality ~ is when prosperity is distributed uniformly amongst society’s members. (How the pie is divided) Rationale People ~ are people who systematically and purposefully do the best they can to achieve their objectives. Market Economy ~ is the allocation of resources as many households and many firms interact with each other within the markets. HOW PEOPLE INTERACT 5. Trade can make everyone better off ~ through and because of specialization  Getting a better price from selling one’s product abroad which is produced at home (Export)  Buying other goods more cheaply from abroad than can be produced at home (Import)  People/firms/countries produce goods and services that they are proficient in 6. Markets are usually (mostly) a good way to organize economic activity via a market economy  Markets create efficiency  Acts as an invisible hand even though self-interest(s) is involved  Resources are allocated through the decentralized decisions of many households and many firms as they interact within the market economy (the invisible hand)  Supply curve is related to the marginal cost  Demand curve is the willingness of consumers to pay a given price  Markets move towards equilibrium and then no further adjustments will occur 7. Governments can sometimes improve market outcomes ~ through their 3 policies:  Ensuring and enforcing property rights ~ because people are less inclined to work, produce, invest or purchase if a large portion of their property is stolen  Intervening in and correcting Market failures ~ market failure is when the production or consumption of a good or service affects bystanders 1. When there’s inefficient allocation of resources because of market power and dead-weight loss created by monopolies or other factors 2. When Externalities effect the well-being of others  Negative externality is pollution  Positive externalities are bees (pollination) and education  Promoting equality over efficiency 1. Taxes or welfare policies can change how the economic pie is divided HOW THE ECONOMY AS A WHOLE WORKS There is a huge variation in living standards across countries over time. Average income in the richest countries is 10 times more than poor countries. The US standard of living is 10 times bigger than it was 100 years ago. 8. A country’s standard of living depends on its ability to produce goods and services  Productivity is the ultimate source of living standards and depends upon the equipment, skills and technology available to workers  Labor unions and competition from abroad has less of an effect 9. Prices rise when government prints too much money  Inflation is almost always caused by excessive growth in the quantity of money which in turn causes the value of money to fall. The faster the government creates money, the greater the inflation rate. (In the long-run which is greater than 3 years) 10.Society faces a short-run (1 to 2 year period) trade-off between inflation and unemployment  Business cycle ~ fluctuations in economic activity; such as, employment, production and growth  Inflation occurs when money supply increases and unemployment is down


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Allison Fischer University of Alabama

"I signed up to be an Elite Notetaker with 2 of my sorority sisters this semester. We just posted our notes weekly and were each making over $600 per month. I LOVE StudySoup!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.