Economics 201, weeks 1 and 2
Economics 201, weeks 1 and 2 Econ 201
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This 0 page Class Notes was uploaded by Katie Conner on Saturday January 23, 2016. The Class Notes belongs to Econ 201 at a university taught by Donna Bueckman in Spring 2016. Since its upload, it has received 110 views.
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Date Created: 01/23/16
Econ wk 1 What is economics about no matter what aspect of economics it is decisions are based on the limitations of resources 2 types of scarcity Absolute scarcity limited resources for everyone Relative scarcity not available in that particular moment at that particular place for you wants are insatiable and different than needs Managing scarce resources or organizing economic actiVity must determine what to produce how to produce it and who will get it Economic systems answer economic questions based on tradition doesn t change the process can be Viable and work well enough but isn t necessarily efficient trickle down dictatortype solution to a question usually doesn t matter if it s marketable or there s a better way people just follow orders run by supply and demand decentralized decision making diVision of labor assembly lines and production capability marketers organize economic actiVity through price selfinterest drives decisions The Wealth of Nations 1776 called the father of economics specialization and trade said households and firms act as if led by an invisible hand to promote general economic wellbeing decentralized decision making Econ Wk 2 Economic systems basic model of the market system circular ow model Models and assumptions using simplified assumptions s simplify the complex world simplified representation Visual model of the economy shows how dollars ow through markets among households and firms includes 2 types of actors households firms and 2 types of markets 1 market for goods and serVices 2 market for factors of production resources the economy uses to produce goods and serVices land natural resources labor capital buildingsmachines In the circular ow model own factors of production sellrent them to firms for income buy and consume goods and serVices buyhire factors of production used to produce goods and serVices and also sell goods and serVices MERHES Ecn39ccncc Fi r 7 E cncic 11 r r GilliKS alhl EEHUEEEEE Ecccc amp 39 39iEEIl39W I in Ecccclcc ccc cerviccc E HU EBHDIE my ccrciccc cclc ccugct FEMS lHUEEH LDE Frccucc and ccll u and ccucumc gjccclc cucl ccrciccc gccclc and ccrciccc Hire and ucc fcctcrc w wc Emil cc ll factcerc if prcc cctcn wf prcducticn Factcu cf REEFgag L lbh rr of Fcc f p w r it F ET HS EFF PHDUETIEN Wages ran H u m39 5339 Icccrnc v r u E Firmc may and Wm E Flinnw cf inputs acct cutcutc E Filcaw f dc larc httpseatt1ecentra1edufacultyjhubertmankiwlist2html What economics is all about focuses on indiVidual decisionmakers study of economywide phenomena Roles of an economist economists play 2 roles Scientist try to explain things scientific method Policy advisors try to give advice to improve policies The economist at work describe world as it is was or could be attempt to describe how the world should be Scarcity gives rise to tradeoffs decisions what must be given up to obtain something not
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