ECON 212 Lecture Notes - Lecture 2: Macroeconomics
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8/24/2016: what is economics about, typical answers: money, stock market, supply and demand a. i. These are correct, but not totally correct. a. ii. Economics is about way more than just money: economics is the study of the ways individuals, businesses, and government make decisions to allocate limited resources to competing wants b. i. Economics assumes that people: are rational, self-interested, and respond to incentives a. i. People try to make themselves as well off ass possible a. ii. These will eventually be relaxed, but not for this course a. iii. Example: we expect students to be rational and self-interested, so we expect that they are likely to cheat. However, if they are caught they will face severe consequences. This is the incentive for them not to cheat. a. iii. 1. Note that incentives do not have to be positive, they merely need to motivate people one way or the other. Microeconomics vs macroeconomics: microeconomics is the study of decision making by individuals, businesses, industries, and governments a. i.
