Macroeconomics Chapter #1
Macroeconomics Chapter #1 eco 105
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This 2 page Class Notes was uploaded by Daniel Hong on Thursday October 1, 2015. The Class Notes belongs to eco 105 at Pace University taught by Mark Weinstock in Fall 2015. Since its upload, it has received 89 views. For similar materials see Principles of Economics: Macroeconomics in Economcs at Pace University.
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Date Created: 10/01/15
Chapter 1 Introduction What is Economics What is Economics Scarcity the resources that we use to produce goods and services are limited 0 Examples Wood Limited Time City Space Limited Income Land Space Economics the study of choices when there is scarcity Factors of Production The resources that are used to produce goods and services Also known as production inputs or resources 0 Natural Resource Resources provided by nature and used to produce goods and services EX wood and water 0 Labor Human effort that includes both physical and mental efforts from people 0 Physical Capitol The stocks of equipment machines structures and infrastructures 0 Human Capitol The knowledge and skills that are acquired by a worker through education and experience 0 Entrepreneurship The effort that is used to coordinate the factors of production Positive VS Normative Analysis Positive Analysis answers the question What is or What will be 0 Facts Normative Analysis answers the question What ought to be 0 Opinions The Three Kev Economic Questions What How and Who The choices that are made by individuals firms and governments answer three questions 1 What product do we produce 2 How do we produce the products 3 Who consumes the products Economic Model a simplified representation of an economic environment that is often employing a graph Isolate Variables Ceteris Paribus A Latin expression meaning that other variable are held fixed 0 Economists use assumptions to make things simpler and focus attention on what really matters Variable a measure of something that can take on different values Marginal Change a small one unit change in value Macroeconomics the study of the nation s economy as a Whole Focuses on 0 Issues of in ation 0 Unemployment 0 Economic Growth
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