ECON 1000 Lecture Notes - Competitive Equilibrium, Microeconomics

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Published on 31 Jan 2013
Department
Course
Microeconomics (ECON 1000) DAY 2 September 11th
Course Overview
- Concept of demand and supply
- Define key terms so you can use them analytically (def’ns are important)
o Define supply and demand empirically and how they affect the economy
o Base to economic analysis
o We will study demand and supply mostly
Shifts in demand and supply
The responsiveness/elasticity of demand and supply
D&S in the context of taxation
Theories that break down how demand works i.e. price theory
Concept of cost
Long-term & short-term supply and demand relationships
Competitive equilibrium
Analysis of monopolies
Competitive markets
- Possibility of choice, not consequence
o Possibility curves (up to 10% of the exam questions)
- On exam, four 10-mark questions involving calculations
What is Economics?
- Goods are economic when supply < demand
- Positive economics = economists are unbiased, merely describing the world
- A limit to resources limits the production of commodities
o Commodities = goods (physical) and services (non-physical) that can be exchanged in
markets
o Resources = inputs used in the production of goods and services
- In classical economics (1770-1870) have 3 resource categories (called factors of production)
o Land pre-human inhuman activity
o Capital not pre-human, inhuman, but an outcome of human production
o Labour any human effort or work put into the production of a commodity
- Modern economics adds another category of resource (factor of production)
o Entrepreneurship or technological advancements -
- Each factor of production has a factor of return (in the production of a commodity)
Resource (Input)
Return (Output)
Land
Rent
Capital
Interest
Labour
Wage
Entrepreneurship
Profit
- In this course, capital = land and capital, and labour = actual labour and management
- Factors of production generate income (the what and why and how are not discussed)
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