ECON 300 Lecture Notes - Lecture 1: Absolute Advantage, Inferior Good, Paul Krugman
Document Summary
Econ 300 (textbook: essentials of economics by paul krugman & robin wells) The social science that studies the production, distribution, and consumption of goods and services. Microeconomics - the branch of economics pertaining to how people make decisions and how these decisions interact. Macroeconomics - branch of economics pertaining with the overall ups & downs in the economy. Market economy - an economy in which decisions about production and consumption are made by individual producers and consumers. Produces choose how much to sell; driven by profit in marketing. All sellers are controlled by the gov"t; gov"t told them what to sell & how much to sell (china"s economy) Market failure - when the individual pursuit of self-interest leads to bad results for society. If the equilibrium quantity does not maximize the social welfare/total surplus, then the market has failed. If the equilibrium quantity is efficient, the market will prosper. Pollution is byproduct of production; it"s an external cost.
