Econ 200 Week 1 Notes
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This 2 page Reader was uploaded by Joe Pollock on Saturday April 12, 2014. The Reader belongs to a course at University of Washington taught by a professor in Fall. Since its upload, it has received 125 views.
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Date Created: 04/12/14
Economics 200A Lecture Notes Week One Lecture 1 Tuesday April 1 This course is about microeconomics and studies some fundamental questions Given constraints how do you make purchasing decisions How do suppliers make decisions and produce goods without talking to us consumers How does the market system coordinate the actions of millions and what qualifications exist to make it work How does the government fit into this What are justifications and effects of government policies The market is a J tmwlrn glJlHnl no one win s at someone else s expense Everyone wins R is one where person A gains what person B loses This is in regards to resources Fundamental Axiom Concerning Resources gt SCARCITY of time money etc Scarcity basically dictates that for a given resource time money etc there is always an alternate use J J 7 JL JL7 l HHll xv Hr xx xx we r rww l V C V W HfTffiffffnl f fx gt not quantifiablemeasurable When analyzing co sumer behavior we hold tastes constant we assume that peope s preferences don t change If we took into account that peope s preferences change it would be very difficult to analyze decision making pl ave preferences S A More is preferred to less more access to goods D D Substitutes everywhere goods can be substituted for other goods To explain postulate 4 we need to understand the Concept of Value We can measure how much they value a good NOT how much they like it Buying a 25 pair ofjeans means consumers are ABLE and WILLING to give up 25 of other goods Marginal Value amount a consumer is willing to give up other goods in order to consume an additional unit of good X Economics 200A Lecture Notes Week One 2 9g 1g A Marginal value of a good falls as the quantity consumed of the good increases Law of Diminishing Value of Goods Total Value the amount a person would be willing to give up of other goods to have ALL of good x rather than have none at all Condit39 n for the consumptio H H7 l7 a Sew 7 7 7 7 7 7 T n Of g00dS and services P a b will V 7 ll an IE1 5 EL Surplus Marginal Value Price Price TConsumer Surplus Total Value Sum of the Marginal Value up to the quantity we purchase Total Expenditure Price Quantity
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