ECON 2 Lecture Notes - Lecture 1: Macroeconomics, Agricultural Productivity, Opportunity Cost
11 May 2020
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Document Summary
There were 1 billion people on the planet when malthus made this gloomy forecast. The earth is populated with over 7 billion people today and yet we have not experienced the kind of mass starvation that malthus expected: malthus did not anticipate rapid improvements in, technology, agricultural productivity. These advancements make it possible for the population to multiply and yet have longer average lifespans and much better standards of living than that of people living in 1798. Economics is the study of how limited resources are allocated to satisfy unlimited human wants. Scarcity means the state of being in short supply. Two branches of economics: microeconomics, microeconomics ("micro" meaning small) focuses on individual units that comprise the economy. In microeconomics, economists analyze the behavior of individual consumers and individual firms operating in individual markets (such as the market for gasoline). A couple deciding to start a family. A firm choosing to open another factory.
