Notes week 1 (8/31)
Notes week 1 (8/31) ECN 150
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This 4 page Class Notes was uploaded by Cierra Notetaker on Friday September 4, 2015. The Class Notes belongs to ECN 150 at La Salle University taught by Francis Thomas Mallon in Summer 2015. Since its upload, it has received 57 views. For similar materials see Macroeconomics in Economcs at La Salle University.
Reviews for Notes week 1 (8/31)
Better than the professor's notes. I could actually understand what the heck was going on. Will be back for help in this class.
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Date Created: 09/04/15
Principles of Macroeconomics Chapter 1 what was covered in class this week Textbook definition of Economics the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided it is a behavior social science Macroeconomics looks at the economy as a whole and examines the behavior of aggregates income employment output and so on on a national scale 0 Land 0 Labor 0 Capital machinery equipment technology to generate output 0 Entrepreneur ability Employment indicates how well the productive resources are being utilized meaning that if there are less goods then the standard of living is lessened as well GDP Gross Domestic Product the value of goods produced by that society Fiscal Policy responsibility of government congress and president etc tools used are tax and spend decisions Monetary Policy controlled by Federal Reserve System affected through control of supply Every nation has productive resources quality of resources available and the quantity of resources available vary from nation to nation Land mass of particular nation is different from other and within land mass is mineral resources and productive capabilities of the land that nation possesses can be very different for example the US i1 good 1r growing particular vegetables anxi fruit but 51 desert may be good for drilling oil Labor can be different due to mass quantity as well as quality of labor can significantly impact productive capabilities of a nation For example skills education and health of workers and lack thereof affect how well labor is productive Capital as a resource technology produced goods are capable of enhancing future production Entrepreneur ability as a resource depends on the inspiration of owners Societies Adam Smith termed the father of economics came with a concept of the invisible hand which says Productive resources of society will be dedicated to the production of the goods most highly demanded by the members of that society as if ordained by an invisible hand However it is the selfish pursuit of profit on the part of the entrepreneur that inspires this allocation of resources Opportunity cost output that is forgone by deployment of productive resources in a particular endeavor For example Let s say there is 2 mutually exclusively potential uses of a man he could be put to work as a farmer growing a crop or alternatively put to work in a factory making machinery A man can only perform HEB of these jobs for 51 living so Mmatever benefit is achieved through the use of his services comes at a cost in the form of the forgone product that did not get made because he was being used in a particular endeavor the one job he was able to do That in which is forgone is called an opportunity cost Each society that has productive resources all wish to maximize standard Hf living T1 the citizens IE their culture iJ1 their society in order to be able to assess how well the resources are deployed there are economic goals 0 Satisfying growing GDP year to year reasonable and sustainable rate of increase 0 Nation attainability of full employment 0 Value of money stability Example given in class about SocietyNation A amp B Both have same productive resources and start off at exactly the same point Let s say resources are deployed by Nation A consumer goods books clothes food available for consumer Nation B dedicate resources to capital goods machinery and equipment no trade between the nations so whatever each land makes is what they have Nation A s people feel immediate gratification from consumer goods Natitnl B does not have immediate gratification their opportunity cost was a low production of consumer goods because their efforts went to capital goods But i11 the future Nation ll put workers TX make sweaters and produced x amount of sweaters the first year NationB made sweater making machines iJ1 year 1 nation ll has 51 definite amount of sweaters x but nation E3 has none Year 2 Bhtion IX is only capable of producing the same amount and level of growth is zero Nation B produces significantly more than the x amount nation A produced in year 1 and 2 Economic growth is substantial in Nation B This is an example of economic goals resource capabilities to expand and in the future have successful GDP In order to make a visual statement of that comparison of Nations deployment of resources between alternative competing goods Production probability curve identifies the maximum output a nation can achieve when operating at optimal efficiency and full utilization of all productive resources Difference between optimal efficiency and full utilization You can fully utilize a resource but would it be efficient to do so There is a difference For example If you are using 4 machines to make lOOO sweaters per week each machine makes 250 this is full utilization because this resource is working to its full potential but if you only sell 250 sweaters a week and not lOOO sweaters this is not optimal efficient What would be efficient is only having one machine if the demand is 250 sweaters a week Utilization is when resource is working and well efficiency pertains to the bigger picture
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