ECON101 Lecture Notes - Lecture 1: John Maynard Keynes, Jacob Viner, Warren Buffett

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carminescorpion131

26 Oct 2016

School

University of Waterloo

Department

Economics

Course

ECON101

Professor

Nafeez Fatima

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ECON101 Full Course Notes

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In chapter 1, we will try to answer the following questions: However, both human-made and natural resources (renewable and nonrenewable resources) are finite. This gives rise to the problem of scarcity. Faced with limited resources, we are unable to satisfy all our wants or desires. Economics is the study of how people allocate their limited resources to satisfy their nearly unlimited wants. Mankind in the ordinary business of life; it examines that part of the individual and social action which is most closely connected with the attainment and with the use of material requisites of wellbeing. Textbook: the principles of economics, 1890 (highly influential). Interested in individuals and how they make their choices. Economics is all about how people make choices. Sociology is about why there isn"t any choice to be made . The theory of economics does not furnish a body of settled conclusions immediately applicable to policy.

Related Questions

Please only anwer the Following question:

Question :focus in on one of the main concepts covered (e.g., scarcity, ceterus pariubus, association vs. causation, opportunity cost, marginal analysis, etc.), define it in your own words, and provide an example. Discuss why you think this is an important aspect in the study of economics.

Answer:

Scarcity is a situation where the availability of resources at our disposal is less then the needs of society.since human wants are unlimited and resources are limited therefore it gives rise to a problem of choice.

Example the oil resources are scarce in relation to Wants .

This is important in decision analysis of any economic problem as without it we are unable to judge which good to produce and sell in market.

Following question:

Can you comment on what you see as the relationship between scarcity, opportunity cost and trade off?

1.According to the LAW of DEMAND, buyersâ/consumersâ buying plans are related___________ to the price of the good itselfâ¦meaning, as prices increase, the quantity demanded __________.

(1) ___________

A.Positively; decreases

B.Inversely; increases

C.Inversely; decreases

D.Positively; increases

2.According to the LAW of SUPPLY, sellersâ/producersâ selling plans are related___________ to the price of the good itselfâ¦meaning, as prices increase, the quantity supplied __________.

(2) ___________

A.Positively; decreases

B.Inversely; increases

C.Inversely; decreases

D.Positively; increases

3.Economics is the study of how people, businesses & government decide who gets what in society when faced with _____________ - the idea that we have unlimited wants/desires yet have limited resources to fulfill said wants/desires.

(3) ___________

A.Scarcity

B.A mid-life crisis

C.Surpluses

D.None of the above

4.The optimization assumption suggests that people make:

(4) ___________

A.Irrational decisions

B.Unpredictable decisions

C.Decisions that make themselves as well off as possible

D.Decisions without thinking very hard

azurebadger172

Microeconomics Multiple choice questions. Please answer all the questions.

1. Scarcity:
A. exists because resources are limited while human wants are unlimited.
B. means we are unable to have as much as we would like to have.
C. will likely be eliminated as technology continues to expand.
D. is not an issue addressed in economics.

2. People are forced to make choices because of:
A. unlimited wants and unlimited resources.
B. limited wants and unlimited resources.
C. unlimited wants and limited resources.
D. limited wants and limited resources.
E. irrational wants and limited resources.

3. Which of the following is closest to the definition of capital?
A. c and e.
B. c and d.
C. Tools, equipment, means of transportation
D. Factories and machinery.
E. Borrowed money.

4. Which one of the following is the most accurate definition of economics?
A. Economics is the study of stocks and bonds.
B. Economics is the study of how people allocate unlimited resources.
C. Economics is the study of how consumers choose to spend their income.
D. Economics is the study of how society chooses to allocate scarce resources.

5. The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
C. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.

6. Which of the following is not a resource?
A. Land.
B. Labor.
C. Money.
D. Capital.

7. Which of the following would an economist classify as capital?
A. 100 shares of Microsoft stock.
B. $50 bill.
C. credit card.
D. lawyer's personal computer.

8. Economics, according to its definition, studies how people:
A. earn and spend money.
B. invest in the stock and bond markets.
C. make choices in the face of scarcity.
D. supply goods in response to demand.

9. Which of the following is the best example of a microeconomic topic?
A. The impact that the money supply has on inflation.
B. The reasons for increases in the price of soft drinks.
C. The effect that federal budget deficits have on the interest rate.
D. The tradeoff between inflation and unemployment.

10. Which of the following is a macroeconomics topic?
A. Wages of textile workers in the Northeast.
B. The cost of producing 10,000 bookcases.
C. The economy's annual growth rate.
D. National demand for fish.
E. Effects of farm subsidies on food prices.

11. An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase "Ceteris paribus" means that:
A. other relevant factors like consumer incomes must be held constant.
B. the gasoline prices must first be adjusted for inflation.
C. the theory is widely accepted but cannot be accurately tested.
D. consumers' need for gasoline remains the same regardless of the price.

12. An economic model is:
A. a plastic scaled version of the economy.
B. a complete depiction of reality.
C. an abstraction from reality.
D. applicable to consumer behavior but not to producer behavior.
E. not an accepted tool of the economics profession.

13. Which of the following sayings best reflects the concept of opportunity cost?
A. "You can't teach an old dog new tricks."
B. "There is no such thing as a free lunch."
C. "I have a baker's dozen."
D. "There's no business like show business."

14. The opportunity cost of watching television is:
A. all of the alternative programs that appear on other stations.
B. zero because there is no money expenditure involved.
C. the alternative use of the time foregone by watching the program.
D. zero if it benefits you.

15. Which of the following does not illustrate opportunity cost?
A. If I study, I must give up going to the football game.
B. If I buy a computer, I must do without a 35" television.
C. More consumer spending now means more spending in the future.
D. If I spend more on clothes, I must spend less on food.

16. When deciding whether to buy a second car, marginal analysis indicates that the purchaser should compare the:
A. benefits expected from two cars with the cost of both.
B. additional benefits expected from a second car with the cost of the two cars.
C. dollar cost of the two cars with the potential income that the cars will generate.
D. additional benefits of the second car with the additional cost of the second car.

17. According to marginal analysis, you should spend more time studying economics if the extra benefit from an additional hour of study:
A. is positive.
B. outweighs the extra cost.
C. exceeds the benefits of the previous hour of study.
D. will raise your exam score.

ECON101 Lecture Notes - Lecture 1: John Maynard Keynes, Jacob Viner, Warren Buffett

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