ECON 101 Lecture Notes - Lecture 1: Productive Efficiency, Mixed Economy, Comparative Advantage
Document Summary
Macro looks at the economy in a global manner. Micro looks at individual behavior in the economy economic agents are individuals, groups of individuals (students etc) and any type of corporation in general where the consumers try to maximize utility and firms try to maximize profit. Mixed economy, goods and services are supplied by boyh private suppliers and government. This creates a problem which is the scarcity of goods and services. 3 ways to deal with it: economic growth, improve use of available resources, reduce the want of goods and services, all of the three will lead to allocative efficiently, productive efficiency, equity and full employment. Is not an add on to our economy plays an important role in regulating, redistributing and enforcing contracts. Model: is a formalization of theory that facilitates scientific enquiry. Economic model: simplified description of reality, designed to yield hypotheses about economic behavior that can be tested.
