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Econ 2000 (scored 92%)

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Department
Economics
Course
ECON 2000
Professor
All Professors
Semester
Fall

Description
Chapter1WhatEconomicsisAboutScarcitywhenwantsexceedourabilitytosatisfyAconditionfacedbylivingcreaturessincethedawnoftimeSeveralinvestmentbankersareallottedadesignatedportionofanIPOforsellingtoretailcustomerscreatingabacklogofordersThroughstudyofsocietysresponsetoscarcitythefieldofeconomicsisbornEconomicsthescienceofdealingwithwantsgreaterthantheresourcesavailabletosatisfyWithinbroadlabelofeconomicstherecanbesomedividinglinesPositivevsNormativeEconomicsPositiveeconomicsfocusesuponthatwhichisNormativeeconomicsisconcernedwithwhatshouldbePositiveEconomicsWhatisreferstoeconomicstudybaseduponobservableandtestedphenomenonCauseandEffectBaseduponcollecteddataweknowsalesrise10ifpricesarelowered5EmphasisonrealitynotopinionorconjectureNormativeEconomicsWhatshouldbereferstothatstudyconcernedwithadvancingidealsandvaluesMorephilosophicalthanempiricalNooneshouldpaymorethan25oftheirearningsintaxesWhyBecauseanymorethanthatgoesagainsttheideaofsmallgovernmentandadynamicfreemarketMicroeconomicsvsMacroeconomicsMicroisconcernedwiththeprimaryelementsofaneconomythatisanindividualafirmaparticularindustryorspecificmarketMacrostudiestheeconomyasawholefirmsandindividualsreactingtoscarcityinthecollectivesenseMicroeconomicsIndividualreferredtoasaconsumerleveleconomicactivityIndividualfirmsbehaviorTheFirmisagenerictermforasinglebusinessunitIndustryofsimilarfirmsSinglemarketscomprisedofindividualsorfirmswithinasimilarbusinesssectorMacroeconomicsTheeconomyatlargeThenationseconomyWorldeconomicgrowthAneconomicmarketnotsubdividedintoindustrygroupsIssuesmayinvolveexchangeratescapitalinvestmentmasslabormarketsortradeScarcityHowdowebetterdescribeourresponsetoscarcityIfthereexistssomethingcapableofrelievingourcravingsthenwehaveattainedUtilitysatisfactionofourwantThecarwedrivetoworkAnewshirtthatmakesyoufeelstylishGoodsthoseitemsprovidingutilityToachievethedesiredutilityweexpendoutavailableresourcesongoodsThesegoodsmaybetangibleorintangibleTangibleobjectsorspecificserviceIntangiblehappinesswellbeingButissomethingcausesusharmordissatisfactionwehavethenencounteredabadTangiblepollutionsewageIntangiblepainandmiseryGoodsmustbeproducedrequiringresourcesThecarwontappearbyitself4TypesofResources1Land2Labor3Capital4EntrepreneurshipResourcesareutilizedindifferingcombinationsforeachandeverygoodResourcesusedasinputsingoodproductionarescarceaswellThereforegoodscannotbeproducedinunlimitedquantitiesEveryonewantsafiletbuttherejustisntenoughtenderlointogoaroundHowthendowedeterminewhowillreceivethegoodandwhowillnotRationingdevicesareintroducedSuchdevicesmaytaketheformofpriceexpressedincurrencyorexchangeoradeterrencesuchasalineThesearenaturallyoccurringOpportunityCostThehighestvaluedalternativeforfeitedNOTthecostofyourchoiceTherewardlostwhenchoosingagainstthatwhichwouldofferitNosuchthingasafreelunchAllchoicesentailsomethingpickingoneovertheotherResourceswillbespentineveryactionmeaningtheycouldhavebeeninvestedinanalternativeactionTheresultisanopportunityforegoneCostsandBenefitsIfindividualsfirmsandsocietiesarerationaletheyconsideronlythosechoicesprovidingutilityabenefitAndifweknowallchoicesentailanopportunitytakenorlostthentheremustalwaysbeacostThuseverychoiceoffersacostandabenefitAssucheconomictheorysuggestsalldecisionsshouldbeevaluatedonthebasisofcostbenefitanalysisShouldweeliminateallpollutionShouldIstudyorgotoworkThesedecisionsarebestjudgedintermsofcostsandbenefitsDecisionsmadeattheMarginIfchoicesareevaluatedonthebasisofcostsandbenefitsthenitstandstoreasonthefollowingquestionwillfrequentlyarriveTowhatextentorquantityisachoicegoodThedecisionismadebaseduponwhethertheadditionalbenefitcontinuestooutweightheadditionalcostAmarginalbenefitMBoccurswitheachadditionalunitconsumedLikewisemarginalcostMCiswhatwemustincurtoconsumethatadditionalunitEfficiencyIfeachcostsandbenefitsareincreasingmarginallythentherewillexistsomepointwherecostsexceedbenefitBeforethatthoughthereisalevelwhereMBMCThisintersectionpointistheideallevelofconsumptionandthatissaidtobeEfficientWhydowewanttocontinueexercisingourchoiceuntilreachingefficiencyBecauseweseektomaximizeutilitybenefitsatisfactionIfwestopbeforeMBMCthereremainsutilitytobegainedgreaterthanthecostRemembertheconsumerfacesscarcityandhaswantsgreaterthanneedsItwouldbeirrationaltostopattainingnewpositiveutilitywhenitisavailableUnintendedConsequencesDecisionsandchoicesexercisedmayproducesecondaryresultsnotintendedbythedecidingpartyEconomistsfrequentlydiscussthisconceptwhenspeakingofgovernmentpolicyandlawIfunemploymentbenefitswereraisedveryhighmorepeoplewouldhavelessincentivetoworkSupposingallstudentsweretoldLSUwouldnolongerrequireanyexamsWhowouldstudyEquilibriumEconomicactivitytendstowardanaturallevelknownasanequilibriumAmarketreachesequilibriumwhensupplydemandPricesmaybesetbymarketsseekingequilibriumGraphinbookCeterisParibusAllotherthingsheldconstanttheeffectofachangeinanassumptionorconditionmayonlybemeasuredifallelseisequalTherelationshipbetweenvariableswillbetestedholdingconditionsceterisparibusEXAMPLERomperRoomanewbartargetingfreshmenwholikelotsofsweetdrinksandfightingistryingtodeterminewheretherightcoverchargeshouldbesetThemanagera34yearolddropoutwhoneverleftTigertownheardyoutookeconandasksforyourhelpAssociationvsCausationAssociatedeventssomecommoneventssuchastimingorsequencesTheeventshowevercloselylinkedareindependentofoneanotherCausationoccurswhenoneeventtriggersthenextThereexistsarelationshipbetweeneventssuchthatthesecondwouldnotexistwithoutthefirstThereisadependantrelationshipBadanalysiswillleadtoargumentssuggestingcausationwhenonlyassociationexistsExamplebanningrapwouldeliminatecrackuseExampleIstartedbuyingacokeeveryFridayfromthevendingmachineTheymusthavecaughtonbecausethepricewentupGroupvsIndividualFallacyofcompositionexistswhenitisassumedwhatisgoodortruefortheindividualwouldbegoodortrueforthegroupExamplethewaytogetaheadinlifeistobecomeaprogrammerLetusallbecomeprogrammersChapter2ProductionPossibilityFrontierSunday November 19 20061112 AMProductionPossibilityFrontierPPFFollowingChapter1thelessoninscarcitytakesthenextstepAssuminglimitedresourcesarealignedinsuchawaythatgoodsmaybeproducedtheremustaswellbelimitstowhatcanbeproducedInanalyzingsuchlimitsandtradeoffsthePPFisatoolforcomparingtheproductionoftwogoodsPPFConditionsoftheModel1Only2GoodsinquestionThetradeoffofproductionthegiveandtakeofchoosingoneversusanotheristhedominantthemeThesemayberepresentativegoodsCokeorpotatochips2literalgoodsGunsorbutterclassicexampleofdefensevsdomestic2Fixedtimeduration
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