notes. *3 things on black board. lecture notes;key-terms;assignments
-10 key concepts
- 1-4 relate to individual
- Facing trade-offs - what would you rather do? with a value to each choice, and sacrifice.
- Opportunity costs - not a dollar figure; but weighing the cost of an opportunity to be used.
- Choosing a little more (or less) - Marginal Analysis; at the point in time ->more or less?
- Influence of incentives - the work so they're included. related to selling and buying.
- 5-7 relate to groups of individuals
6. Effectiveness of Markets - The market can adjust the price itself; thus this sends signals.
7. The role of Governments - economics and government don't work well together.
- 8-10 relate to Economies of a whole
- Production & Standard of Living (S/L) - what is being produced? related to our s/l.
- Money and Inflation - printing money on access. Monetary easing. all it does is to raise prices...spanish silver did them nothing for their productivity (what they produce).
- Inflation and Unemployment - could bring for a short period, employment; but due to inflation it comes back ..more money spending...
exersizes/study questions - on chapter 1 p.22
SOME OF THE CONCEPTS IN COURSE:
- Scarcity + Choices - things are limited and restriction, so what do we use?
- best to look at our desires as unlimited (there are demands for anything we sell); Limited means. Budget lines telling me the max I can buy for each interaction within my limits.
- Productions possibility model/table: can we produce endlessly? no. what do we deal with: i. land(fixed); ii. capital(fixed) - machinery and production;iii. labour (full employment) - the kinds of jobs; iv.entrepreneurial - the guy who puts it all together (risk taker - The innovator). How much and how many? -->Opportunity cost = as things get scarce over the long run, we are limited. we will look at the marginal benefit(MB) vs marginal cost(MC) MB>MC=good MB=MC->stop MB<MC = go back.
- Production possibilities frontier: Assuming full employment and all machinery. anything under the curve, means unemployment or inefficiency.
- Purposeful Behaviour - In principal or the theory - 1st we observe. 2nd we hypothesize, 3rd you test it. develop the theory -> in economics we call it a law and principle. some laws have exceptions. law of demand the lower the price, the more you can sell.
- Marginal Analysis - "Ceteris paribus" things change...with time over time. "but with other things the same"
- Macro vs Micro - Micro: compared to individual scale or groups or markets. Macro: Deals with all markets groups individuals together. LARGE AGGREGATES (Larger areas/groups). Unemployment rate.
- "Positive" vs Normative statements - Low temps in Canada lead to slower growth = positive statement (can be shown and proven); Our winters are too cold = Norm (because there is a judgement involved).
- Nature of the economic problem
Freedom of Enterprise: Business can buy and sell whatever they choose as long as its safe health wise and security.
Self Interest: Businesses are in the business to make a profit. If not for profit, you will disappear. Businesses and consumers seek out profits.
Competition: within the limits, there is no one central power of market share.
Markets & Prices: Governments are involved
--->Included: Technology; Communism compared to Capital (markets vs no markets)
--->Use of money- being used because it is more practical.
Five Questions (looking at the country)
1. What will be produced? It must be able to be produced.
2. How will goods and services be produced? (G&S) will be produced by lest costly methods.
3. Free? Who will get it? whoever pays..
4. How will the system change? In market economy, change is brought about mrkt$'s.
5. Porgress - How? With the entrepreneur; Innovation.
Chapter 1&2.
