Chapter 1 Part 1 Notes
Chapter 1 Part 1 Notes ECON113103
Popular in Principles of Economics: Microeconomics
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This 2 page Class Notes was uploaded by Alexandra Intriago on Wednesday January 20, 2016. The Class Notes belongs to ECON113103 at Boston College taught by Professor Francesca Toscano in Spring 2016. Since its upload, it has received 203 views. For similar materials see Principles of Economics: Microeconomics in Economcs at Boston College.
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Yes YES!! Thank you for these. I'm such a bad notetaker :/ will definitely be looking forward to these
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Date Created: 01/20/16
January 20, 2016 Chapter 1 What is economics? Two branches of economics: o Macro o Micro Producers and consumers Deals more with people’s choices How markets behave and a place in which producers, who are offering a good, and consumers, who are looking for a good, interact Economics is used for three things: o Markets o Predict a recession Tools to predict Understand people’s choices o Determine how people make choices Markets Market economy o US, Europe o Producers and consumers decide freely what to produce and what to consume Command Economy o North Korea, China o Production and consumption is ruled by a central authority o Commands how much to produce or consume Rules for How People Make Choices 1) By considering limited resources a. How much they have b. Example: Buy a house in Miami or Buy a BMW i. Choice driven by how much money you have, which is affected by a budget and time limits c. Example: Jazz Class vs. Gym Class on a Friday evening i. Consider what you have 2) By considering the opportunity cost balance cost and benefit a. Example: Economics class vs. Jazz class i. Opportunity cost of economics class is the benefit you would have derived by taking the jazz class ii. Every time you make a choice, you are excluding the alternative 3) By applying the marginal analysis a. Example: Restaurant with 6 workers i. Should I hire an extra worker? – this question is Marginal Analysis ii. Owner is choosing how many people he should have b. “What happens if I have one unit more?” 4) To respond to incentives a. Example: BC offers discounts for parking spots in front of the gym i. People respond to incentives by changing their choices
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