PRECISE AND DETAIL Summary - MICROECONIMICS CHAPTER 1 Everything you need to know!
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Course
MICROECONIMICS
Institution
MICROECONIMICS
What is economics?
The study of how we make decisions in a world where resources are limited
Why should one study economic?
Economics helps you think more clearly about the decisions you make everyday and tp understand better how the economy functions and why certain things happen the wa...
microeconomics principles for a changing world cha
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MICROECONIMICS
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Microeconomics: Principles for a changing world: Chapter 1
Economics
The study of how people seek to satisfy their needs and wants by making choices
Economics is the study of
how society manages its scarce resource Or
The study of how individuals, firms, and society make decision to allocate limited resources to
many competing wants
Scarcity
Limited quantities of resources to meet unlimited wants
Economics focuses on the allocation of scarce resources to satisfy unlimited wants as fully
possible
Incentive
a positive or negative environmental stimulus that motivates behavior within individuals and
firms in their best interest
Microeconomics
The study of the decision making by individuals, businesses, and industries.
Macroecomics
The study of the broader issues in the economy such as inflation, unemployment, and national
output of good and services.
Ceteris paribus assumption:
holding all other things equal meaning we will hold some important variables constant
Efficiency deals with
How well resources are used and allocated
Efficiency
How well resources are used and allocated. Do people get the goods and services they want at he
lowest possible resources cost? This is the chief focus of efficiency.
Equity
The fairness of various issues and policies.
, Positive question
A question that can be answered using available information or facts.
Normative question
A question whose answer is based on societal belief on what should or should not take place
Opportunity cost
The value of the next best alternative; what you give up to do something or purchase something
What is economics?
The study of how we make decisions in a world where resources are limited
Why should one study economic?
Economics helps you think more clearly about the decisions you make everyday and tp
understand better how the economy functions and why certain things happen the way they do.
Microeconomics is the study of
How households and firms make choices, how they interact in markets, and how the government
attempts to influence their choices
Macro economics
The study of the economy as a whole
Macro Economics deals with...
Increase economic growth, the impact of government speeding and taxation , the effects of
monetary policy on the economy, and inflation
Efficiency equation
Efficiency= Useful energy output/total energy inpuT
-Measured in %
Efficiency
Using resources in such a way as to maximize the production of goods and services
Production efficiency (PE)
Production efficiency occurs when good are produced at the lowest possible cost,
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