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Lecture 1

ECON 103 Lecture 1: Econ 103 Ch 1 & 2 Notes


Department
Economics
Course Code
ECON 103
Professor
Ryan Allen
Lecture
1

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Econ 103: Principles of Micro economics
Sept 8, 2015
Studying tips:
Read book 2-3 times
Take Notes
Study Groups
Do tutorial questions (before class)
Don’t study hours in a row
Read 35-45 minutes then take break
(~10 minutes)
Introduction: Basic Concepts (Ch 1 & 2)
Economics – Social Sciences
Microeconomics – Specific way of looking at behavior
and decision-making.
Assumptions = Principles, something believed to be
true
Principle of Maximization – Everyone is driven by the
desire to advance their interests and improve their well-
being.

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!!! People do their best, can still make mistakes !!!
Our subjects will be…
Consumers
Choose – which goods and how much to buy
Take prices and income as given
Objective to maximize:
-Value (net of spending): Benefit, Happiness.
-Value – Spending = Consumer Surplus
Firms
-Choose – output, amounts of labor and capital
-Take input prices and market structure as given
Objective: Maximize
Formula
Profits = total revenue – total costs
Choices:
1) Binary, All-Or-Nothing
When do you decide to do something?
If total benefits > total costs
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