ECN 104 Lecture Notes - Lecture 1: Investment Goods, Capital Good, Ceteris Paribus
Document Summary
A1-1(appendix) understand graphs, curves, and slopes as they relate to economics. Definition of economics: the social science that studies how individuals, institutions, and society make optimal choices under conditions of scarcity, human wants are unlimited, but the means to satisfy the wants are limited. Imperfect information may lead to an unexpected wait. Imperfect information may cause some people to leave when they see a long line: when a customer reaches the counter, other economic decisions are made about what to order. From an economic perspective, these choices will be made after the consumer compares the costs and benefits of possible choices. Natural scientists can test with much greater precision than can economists. They have the advantage of controlled laboratory experiment. Economists must test their theories using the real world as their laboratory: graphical expression many economic relationships are quantitative, and are demonstrated efficiently with graphs. Microeconomics and macroeconomics: microeconomics looks at specific economic units.