Economics 1021A/B Lecture Notes - Lecture 2: Technological Change, Demand Curve, Comparative Advantage
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Econ 1021A, Lecture 2, Wednesday, September 23, 2015
Using Graphs, The Economic Problem, How Prices and Quantities are Determined (Demand and Supply)
•Expenditure, Income and the value of production
•Living standards and productivity growth
•Inflation: a money problem
•Unemployment: Productive and wasteful
What Economists Do
–What should be
–Can be proven true or false
We will be focusing only on positive statements
•Observation and measurement
–Ceteris paribus – other things being equal
•Graphs represent a quantity as a distance on a line.
•The x-axis runs horizontally.
•The y-axis runs vertically.
•The origin is their intersection.
•Points can be identified by a pair of coordinates.
•Points show relationships between 2 quantitative variables.
Four Patterns to Watch For:
–Variables that move in the same direction. (Positive relationship) x and y
move positively at the same time
–Variables that move in opposite directions. (Negative relationship) as x
and y move in opposite directions
–Variables that have a maximum or a minimum. (parabolas)
–Variables that are unrelated. (we don’t care about these)
Calculate the slope of a line
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