Econ 1020 Week 1 Notes
Econ 1020 Week 1 Notes ECON 1020
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This 3 page Class Notes was uploaded by Matthew Stein Oakley on Sunday January 31, 2016. The Class Notes belongs to ECON 1020 at University of Denver taught by Dr. Chiara Piovani in Winter 2016. Since its upload, it has received 22 views. For similar materials see Intro to Macroeconomics in Economcs at University of Denver.
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Date Created: 01/31/16
Traditional Economics (Orthodox) Follows neoclassical economics since 1980 “Trickle-down” theory – money goes down the pyramid starting from rich people. Traditions, customs, beliefs shape the goods and services produced o As well as rules and manner of their distribution Countries that use this type of economic system are often rural and farm-based Critical Economics Radical economics Post-Keynesian economics Feminist economics Institutional economics -Epistemology is the investigation of what distinguishes justified belief from opinion -Society -Well-being (2 factors): 1. Economic growth (GDP) 2. Efficiency (use resources in best possible way) Other dimensions matter: Environmental sustainability Distribution Unpaid activities o Taking care of children/elderly o Housework o Volunteering work Markets Allow free choices, but not always free Self-regulating Economy always gravitating around equilibrium Government roles: o Property rights o Contracts o Market failures o Externalities -Disequilibrium is more frequent than equilibrium Conflict and power matters: o Corporations Have both political and economic power o Environmental destruction o Discrimination (immigrants often fall subject to unemployment) o Policies are necessary to improve upon market institutions Radicals: systemic change GRAPHS -Relationship between two variables - Consumption behavior 1 individual If price increases, the quantity demanded goes down o Inverse Relationship between price and quantity when talking about CONSUMPTION -Movement along the curve of a demand graph -Explained by change in price (Quantity demanded) -Shift of the curve on a demand graph -A change in a factor affecting the relationship between the two variables (not directly represented on our graph) -Slope of demand curve matters - Rise/Run = the change in Y/ the change in X = the change in price/the change in quantity -The flatter the curve, the bigger the adjustment and the smaller the slope CHAPTER 2 – Basic concepts and models in traditional economics o Scarcity – limited amount of resources given at a specific time o Resources are considered inputs or factors of production Labor (workers) Capital (physical capital – all machines and equipment involved) Land (natural resources) And available technology o Resources + Technology PRODUCTION Goods and Services Objective: efficiency o Because of scarcity, there is a use of trade-offs in the use of resources o Opportunity cost considered for trade-offs PPF: Production Possibility Frontier o Assumptions o 2 goods that can be produced: “Guns” (Invest in heavy industries in order for more capital available) “Butter” (Consumer goods) o Given resources and technology Labor Workers are specialized o Graph is bow-shaped o Increasing slope along the production possibility curve o Each point on the curve gives us a maximum of production given our resources
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