What is Economics

Microeconomics (ECON 1000) DAY 2 – September 11 th 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