Econ Notes Week 1
Econ Notes Week 1 ECON 1113-001
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This 2 page Class Notes was uploaded by Parker Thurston on Monday January 25, 2016. The Class Notes belongs to ECON 1113-001 at University of Oklahoma taught by William Clark in Summer 2015. Since its upload, it has received 401 views. For similar materials see Principles of Economics Macro in Business at University of Oklahoma.
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Date Created: 01/25/16
Week 1 2 points of emphasis selfinterest and incentives explains overall economic behavior gt means implication if marginal benefits gt marginal costs gt do it marginal benefit 1 more unit marginal cost cost of producing 1 unit economics the study of how people choose to use limited resources to fulfill unlimited wants and needs Resources things used to produce goods and services Wants what people would buy if they had unlimited incomes Microeconomics the study of individuals households and firms Macroeconomics the aggregate of microeconomic decisions Macro specifics overall price level unemployment national income 3 QUESTIONS What to produce How will it be produced who gets the production 2 answers Command economies centralized central authority makes all decisions Market economies the price system superior characterized by private ownership of resources Assume people are rational they will attempt to act in their best interests Criticism behavioral economics emphasizes psychologicalemotional aspect of decision making bounded reality people cannot evaluate all aspects of a decision so they use rules of thumb make assumptions to form models of reality ceteris paribus assumption everything else being the same assumption all other things being equal examine 1 change at a time Models or theories simplified representations of reality used to explainpredict behaviors usefulness of model how well it predicts events Positive economics statements of what is eg if A then B describes Normative economics statements of what should be economics is in general terms a way of thinking about the world
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