CDAE 061 Week 1 notes
CDAE 061 Week 1 notes CDAE 061
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This 3 page Class Notes was uploaded by HD on Sunday April 17, 2016. The Class Notes belongs to CDAE 061 at University of Vermont taught by Joshua Farley in Fall 2016. Since its upload, it has received 121 views.
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Date Created: 04/17/16
8/30/16 What is economics? o Allocation of scarce resources among alternative (desirable) ends For future generations Desirable ends = health, happiness, food, community, etc. o How do we allocate? Man’s dependence for his living upon nature and his fellows Economy is embedded in society which is embedded in nature Market economy o Self regulating market economy All factors of production are commodities Commodity = marketable item produced for wants/needs Neoclassical economics o Focuses primarily on self regulating market economy o Built on math framework o Assumptions People are rational/self interested/always want more Economy can and should grow forever Ecological economics o No single methodology (transdisciplinary) o Built on the assumption that economic system is a subsystem of the global ecosystem Expands when it needs to o Can’t make something out of nothing (thermodynamics) o Main goal Future matters Ecological sustainability o Not elegant or simple Highly complex world 9/1/16 Critical Concepts of Economics o Definition of economics Allocation of available resources among alternative desirable ends, within and between generations o What are desirable ends? Is the answer to this based on ethical values or objective science? (normative or positive?) o What do economists say is the goal? Endless growth Satisfaction of individual preferences Preferences weighted by purchasing power Maximization of monetary value Does sustainability matter? Distribution? Who should own natural goods? Is stability desirable? Job security? o What are the scarce resources? Scarce = not enough to go around Scarcity principle = if we use a resource to do one thing, we can’t use it to do something else “Scarcity characterizes virtually everything” Is this true? What happens to GNP when abundant resources (free resources) become scarce? It goes up All about choosing how to use scarce/non-scarce resources What is scarce has changed over time 4 Capitals Model o Natural o Built = human made things o Human = knowledge, health, productivity o Social = relationships with friends and family What are the properties of the resources? Can they be owned? If one person uses it, does it leave less for others? Does one person’s use have a negative impact on others? Is it created by nature, society or individuals? o How do people behave? Homo economicus self interested Rational Rely on emotions? Cooperative social animals Homo communicus We care about fairness H naturalis Concern with sustainability and whole system preferences o How do we allocate resources? Markets and price theory Free choice for everyone Under certain conditions maximizes monetary value (but is this a suitable goal?) Social ownership of the means of production Participatory democracy State ownership Common ownership
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