ECON 202 Lecture Notes - Lecture 1: Demand Curve, Mixed Economy, Planned Economy
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<div><b>Ch 1.</b></div>
<div>What is economics about?</div>
<ul>
<li>Scarcity
<ul>
<li>Unlimited wants exceed limited resources</li>
</ul>
</li>
<li>Economics
<ul>
<li>Study of choices people make to attain their goals (given scarce
resources)</li>
</ul>
</li>
<li>Economic Model
<ul>
<li>Simplified version of reality</li>
<li>Used to analyze real-world economic situations</li>
</ul>
</li>
</ul>
<div><br/></div>
<div>Branches of economics</div>
<ul>
<li> Microeconomics
<ul>
<li>Study of choices people make to attain their goals (given scarce
resources)</li>
<li>How individuals interact in markets</li>
<li>How the government attempts to influence individuals' choices</li>
</ul>
</li>
<li>Macroeconomics
<ul>
<li>Study of the economy as a whole</li>
<li>Inflation, unemployment, and economic growth</li>
</ul>
</li>
</ul>
<div><br/></div>
<div>Trade-off</div>
<ul>
<li>Because of scarcity, producing more of one good/service means producing less
of another</li>
<li>Forces society to make choices</li>
</ul>
<div><br/></div>
<div>3 fundamental questions society must answer because of trade-offs</div>
<ol>
<li>What goods/services will be provided?</li>
<li>How will the goods/service be produced?</li>
<li>Who will receive the goods/services produced</li>
</ol>
<div><br/></div>
<div>Centrally planned economics versus market economies</div>
<ul>
<li>Free market
<ul>
<li>Get government restrictions on how a good/service can be produced or
sold</li>
</ul>
</li>
<li>Centrally planned economy
<ul>
<li>Economy in which the government decides how economic resources will be
allocated</li>
</ul>
</li>
<li>Mixed economy
<ul>
<li>Most economic decisions result from the interaction of buyers/sellers but
the government plays a significant role in allocation (most economies are
mixed)</li>
</ul>
</li>
</ul>
<div><br/></div>
<div>Market</div>
<ul>
<li>Group of buyers and sellers of a good/service </li>
<li>Institution in which they^ come together to trade</li>
</ul>
<div><br/></div>
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Document Summary
study of choices people make to attain their goals (given scarce resources) how the government attempts to influence individuals" choices because of scarcity, producing more of one good/service means producing less of another 3 fundamental questions society must answer because of trade-offs get government restrictions on how a good/service can be produced or sold economy in which the government decides how economic resources will be allocated most economic decisions result from the interaction of buyers/sellers but the government plays a significant role in allocation (most economies are mixed) group of buyers and sellers of a good/service institution in which they^ come together to trade 3 important ideas when we study how people interact 3: where prices come from: the interaction of supply/demand table that shows relationship between the price of a product and the quantity demanded amount of a good/service that a consumer is willing/able to purchase at a given price