ECON 2 Lecture Notes - Lecture 1: Historical Cost, Opportunity Cost, John Maynard Keynes
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ECON 2 Full Course Notes
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Document Summary
Economics: oikos = house + nomos = rule, rules of the house . Social science = deal with how social world works. Study of how society manages its scarce resources. Society: resources between national defense, consumer goods, protecting the environment, and other needs. Scarcity: there are limited resources for society; manage by. Macroeconomics deals with economy-wide movements in output, unemployment, and inflation. Integrates theory and empirical work and eventually makes policy recommendations. Rarely uses controlled experiments (hard to implement), models (ex: supply and demand) Adam smith: 18th century - foundation for economics. Inquiry into nature and causes of the wealth of nations. Pursuing self-interest guides society like an invisible hand. John maynard keynes: foundation for macroeconomics three levels individuals: how people make decisions. 1: society: how individuals interact, economy: how the macroeconomy works. Principle 1: people face tradeoffs (in their decisions) Efficiency: when society gets the most from its scarce resources. Equality: when prosperity is distributed uniformly among society"s members.
