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Complete Principles of Economics I/Microeconomics Notes Part 1 - Got 93% in the course!

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Department
Economics
Course
ECON 1131
Professor
All Professors
Semester
Fall

Description
Microeconomics Notes: Chapter 1 Keely Henesey Economics:  social  science concerned with how  optimal choices  are made under  conditions of  scarcity Economics  Perspective: ­ Economic Perspective Stresses: o Resource scarcity and the necessity of making choices o Assumption of purposeful behavior  Individuals act to maximize their utility, weighing costs/benefits o Comparisons of marginal benefit and marginal cost ­  Opportunity Cost  : what you give up to get what you want (due to scarcity,  opportunity cost is present whenever a choice is made) ­  Scientific Methods : employed by economists to establish economic theories  (cause­effect generalizations about the economic behavior of individuals) o  Ceteris Paribus   (other­things­equal assumption): assumption that  factors other than those being considered are constant Microeconomics & Macroeconomics: ­  Microeconomics  : examines behavior of individuals ­  Macroeconomics  : examines economy as a whole or it’s aggregates (collection  of specific economics units treated as if they were one unit; government,  household, and business sectors) ­  Positive Economics : deals with factual statements (what is) ­  Normative Economics  : deals with value judgements (what should be) Individual’s & Society’s Economizing Problem: ­  Economizing Problem  : choices necessary because economic wants exceed  economics means ­ Individual’s Economizing Problem: wants exceed limited income o  Budget Line  : curve that shows the combinations of two products a  consumer can purchase with a specific income Shoes All combinations of  shirts and shoes  given a specific  income ­ Society’s Economizing Problem: how to allocate scarce economic resources o  Economic Resources/Factors of    Production    Input  : natural, human, and  Shirts manufactured  resources that go into production of  goods/services  Land (all natural resources); Labor (physical/mental activities  people contribute); Capital Goods (
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