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ECON 101 Lecture Notes [Full Course] File contains concise, accurate summary of lecture notes taken during the course. Arranged chronologically by date for ease of use. Contains notes from the entire semester.


Department
Economics
Course Code
ECON101
Professor
Larry Smith

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September 9th 2008
Econ 101
Change in real wages 2000-2007:
High School -0.7%
Associate Degree -1.9%
Bachelor’s Degree -0.9%
Advanced Degree +0.2
Number of students enrolled in post-secondary education:
Canada 1,192,570
Australia 1,012,210
China 15,186,217
France 2,119,149
Google does not give you access to copyrighted material; this is why it does not have the answer to
everything. Your tuition fee gets you access to proprietary knowledge through the school library.
Teachers have unsound pensions, all it takes it one piece of legislation pushed by the angry taxpayer and
your job and/or pension is gone. Public servants are also at the mercy of taxpayers. Even if you work in
the military, American defense funding ends up in China while American military capabilities deteriorate.
Macro economics = Society’s achievements
Microeconomics = Individual achievements
Innovation = The greatest career achievement
The planet is going up in flames for more than one reason. Social networking (Facebook) was created
before computers. If you don’t make a contribution to society you’re a creep. How do you make a
contribution? Create, develop, deliver, etc. something that people want and will pay good money for.
Freely want = not forced to buy the product.
Freedom is the best thing you can buy, to achieve a big income you need to make a big contribution,
how often? More and more each year. Competitive pressure creates longer work hours. Employers are
looking for ways to make employees work until they drop, if he rebels then he endures a marketing
pitch trying to make him feel important to the company (BlackBerry). Companies have discovered,
however, that some people talk so often on their BlackBerry that they stop working.
The BlackBerry is a powerful solution to an economic problem; it combines premium pricing, increased
productivity and doubles as a status symbol. At some level this strategy is doomed however because of
the above mentioned BlackBerry obsession.

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Example: A student wants to enter the finance industry but falls in love with another student at UW.
They get married and decide that they want to be a tight knit family, meaning that they don’t want to
work brutal hours. The student wanted it all, career success AND personal success. He decides to create
innovation by applying the principals of economics and creates the BlackBerry. He stole customers from
competitors and deflected competitive pressure.
To be a successful innovator you have to fine a mistake the “other guy” makes by doing research. In this
case the mistake is missing customers; the missing customers were rich people who could afford almost
anything. By pushing hard enough he convinced his boss to let him bring in the missing customers. He
ended up forging a personal relationship with all these customers and therefore became untouchable in
the company because everybody knew that he could lead these missing customers to competitors if he
wanted to.
Example: A math student discovers a way to eliminate the risk of loans through complicated formulas,
derivatives, etc. and many try to imitate his method. In the end however it becomes evident that his
innovation is nothing more than a scam. A scam which ended up causing huge damage to the American
economy.
Example: A co-op student working in New York is introduced to the project from hell. He is also given a
bunch of stupid jobs and in his spare time he decides to fix this disaster project. He goes to his boss and
offers to show his solution to the project’s clients but it patronized. The managing partner chews him
out for working on this solution during company time. He continues to push and eventually they decide
to keep his idea as a last resort in the upcoming meeting with the client. Through a series of events his
idea is brought up in the meeting and after 20 minutes of debate the manager tries to bring the
conversation back to what he was talking about earlier but the client stops him. He says that he likes the
students plan and that he would like to see it implemented. After this the student is pushed up to
project manager and is told that when he graduates he can choose any of the company’s international
offices to work in.
“Not a team player” = Co-op kiss of death.
You’re only as good as what you’ve done recently.
September 16th 2008
ECON 101
- An enormous amount of people are out to take your job, competition from machinery and low
wage workers.
- There is currently a global economic distress amongst all the big players

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- There is a shortage of capital around the world which affects everybody around the world
because the pace of economic activity slows down.
- A company hires young people to expand, companies cannot expand in this current climate
- The economy of the United States is shrinking, jobs continue to leave the country and not
return, there is no economic process that can reverse this damage in a short period of time
- One of the oldest investment banks in America (Leamen Brothers) went bankrupt, the
government could not bail them out and nobody was crazy enough to buy them. Employees had
their retirement fund tied up in the bank which is now all gone
- The largest stock broker firm in America (major lynch) sold themselves to Bank of America at a
low rate out of desperation
- AIG Insurance is also on deathwatch
- You need to guard yourself from competition and stupidity
- The rate of wealth being created is sinking and the number of workers in silicon valley is still
below its peak from the year 2000
- Check 2a and 2b from the course notes
- Adam Smith: “Rise to the Standard or get beaten into submission
- To be an innovator you need to create plans for humans, not Martians
- Utility = Happiness, Welfare and Satisfaction
- Prof. Smith does not like David Suzuki
- Consumers spend most of their money on services and not goods, not inherently selfish
- First principal, we assume that people are rational
- It’s important to make predictions; you must be able to make decisions about the future. You
must predict the demand for something which can be done to a high degree of accuracy but not
flawlessly
- Human nature is endless restlessness; we are never satisfied and always looking for something
new. Wants are unlimited but the resources to satisfy those wants are limited.
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