ECON102 Chapter Notes - Chapter Lecture 1-5: Externality, Weighted Arithmetic Mean, Factor Cost

• School: University of Alberta
• Department: Economics
• Course: ECON102
• Professor: All

Document Summary

Lecture 1 roadmap of the entire course of econ 102. Limited or scarce resources + unlimited wants = leads to economic problems. Economics is the science that studies how to deal with the economic problem. Microeconomics: studies the behavior of each individual economic unit, studies the demand of one consumer and producer. Macroeconomics: studies behavior of the whole economy (aggregates totals). Microeconomics studies the little trees inside the big economy box here while macro studies the whole tree. Inflation, unemployment, gdp, national income are topics discussed in macroeconomics. Output gap chapter 9 (means that there is a difference, that is why we subtract) = actual output (y) how much goods and services we actually produce. Potential output (ynr) what we could produce if we use all resources (sometimes called the full employment all peoples employed). Y is less than the ynr (potential full capacity): recessionary gap. Y is equal to ynr: no gap, full employment.