ECON 201 (Microeconomics) Notes, Week 1
ECON 201 (Microeconomics) Notes, Week 1 Econ 201
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This 0 page Class Notes was uploaded by Jensine Bonner on Thursday February 11, 2016. The Class Notes belongs to Econ 201 at Towson University taught by Dr. Leppo II in Winter 2016. Since its upload, it has received 61 views. For similar materials see Microeconomic Principles in Economcs at Towson University.
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Date Created: 02/11/16
ECON 201 Microeconomics Notes taken interpreted and formatted by J ensine Bonner Week 1 of Notes Chapter 1 2116 February 1 2016 HH Household BF Business Firm G Government s services g goods l labor K Capital S supply Microeconomics began with 2 economists 0 Adam Smith Founder of Modern Economics The Wealth of Nations 1776 0 Karl Marx Communist Manifesto 1848 Das Capital 1867 The Difference Smith Believed the distribution of resources would be better through free market M a rx Was concerned with the distribution of resources Put Silev 0 Economics will always come down to supply amp demand and at the end of the day consumers me and you are in control of the demand 0 Also large business firms are against free market because they pose competition 0 True innovators and hard workers are rewarded through true Capitalism Free Market Market Economy Is supply amp demand with little no control from the government A completely free market is an unrealistic form of market economy where buyers and sellers are allowed to transact freely This transaction is based upon a mutual agreement on price without intervention from the state eX TaX subsidies or regulation Financial markets are seen as securities and they are commonly traded The price of these financial markets are not affected by availability Foreign exchange rates rise and fall freely through supply amp demand for currency Law of Supply amp Demand Supply means Supply of a resource Demand means Demand for that resource Availability of a particular product and the demand desire that product has on prices If there is a low supply amp a high demand The price will be high The greater the supply amp the lower the demand the lower the price will be 2316 February 3rd 2016 What is Economics Economics is essentially the study of choices made by people who are faced with scarcity 0 It is broken down into Macro amp Micro economics 0 M a c ro The study of a nation s economy as a whole Mic ro Looks at choices made by households HH Business Firms BF amp Government G and how these choices impact the markets for a particular g goods and s services 3 Basic Questions that are answered in both Micro amp Macro 1 What to produce In reality this is answered 2 2 How to produce In reality this is answered 3 last 3 Who consumes In reality this is answered 1 4 Economic institutions that we focus on 1 H H Household 1 or more persons living under a roof the HH is catalyst that makes an economy work Makes up 67 and the gov makes up 18 Ga i n income Income is the ow of resources or to those productive resources Barter amp trade Both parties involved want what the other has Consu me 1 Durable goods the product lasts 3 years 2 Non durable goods last 3 or less years 3 Service Intangible item of consumption Save g Savings 2 2 BF Business Firms Takes input amp changes them into intermediate amp final goods for consumption In 9 uts Factors of Production 1 Land nat resources HH controls 2nd Capital K human sacrifices or effort 3rd Entrepreneur Individual who coordinates our FOP Factor of Production 2516 February 5th 2016 4 Economic Institutions that we focus on cont 3 Government G 1 Establish rules for a level playing field In order to minimize cost rules should be simple amp concise 2 Provide a supply S A uniform money supply encourages economic stability An unstable supply leads to in ation can lead to hyper in ation Hyper In ation 3 Provide external benefits amp cost that we would not provide ourselves 4 Financial Intermediaries The money in capital market Ex banks amp brokerage firms Positive Economics What is Q will be Normative Economics What should be Ceteris Paribus Factors held fixed or other things being equal End of Week 1 Notes and end of Chapter 1 Notes Notes will be uploaded weekly so be sure to come back again Jensine Up Next Week 2 Beginning of Chapter 2 Notes
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