Class notes
Lesson One of Introduction to Microeconomics Class
- Course
- Microeconomics
- Institution
- Palm Beach Atlantic University
In this document, it gives a summary of lesson one for the class: Introduction to Microeconomics.
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1. WeekSaturday, March 9, 2024 4:44 PM
Lesson 1:
Introduction to Microeconomics:
Economics is the study of decision making in a world of scarce resources and unlimited wants.
What is Scarcity? Not having enough of something
Example: have 24 hours in the day but still not able to do some other things
Who deals with scarcity? Everyone deals with scarcity
Resources: (these are limited)
Inputs used in the production process
Natural resources: land and anything provided by nature. (ex. Woods..)
Labor-time humans spend producing
Capital- long lasting tools used for production
Can have human capitol which is the education and knowledge of a field.
Can be physical capital which is the desk the computer is on
Money is not a resource of capital (not long lasting tool)
Technology- electronic forms of capital
Entrepreneurship- combining resources in a new or innovative way.
why study economics?
To understand the world better:
Global and catastrophic events such as pandemics, wars, famines, epidemics, and depressions.
Shows the pros and cons of these events
Local and personal events such as salary, rent, gas prices, stock market fluctuations.
To achieve social change:
Understand the origin at social problems
Explain why previous efforts to solve them haven't succeeded
Notes Page 1
, Design new, more effective solutions
To help in your professional life
Microeconomics: looks at individual decision making by firms and individuals(people) or individual
industries
Ex: the price of college tuition has more than doubled over the last 30 years in the US.
Macroeconomics: looks at the economy as a whole. Overall unemployment, economic growth,
inflations, overall output(GOP)
Ex: overall prices in the US have increased this last year over 10%
Practice:
What will the impact be on airface prices worldwide if Spirit merged with Jetblue? Microeconomics
What has caused interest rates to rise in the US? Macroeconomics - intesest rate is the overall rate of
counting money
How will a shortage in microchips impact the automotive industry in the US? Mircoeconomics
Does an increase in personal tax rates increase the overall US unemployment rate? Marcoeconomics
What has caused inflation in the US at 8.5%. Macroeconomics
Why is overall labor force participation rate lower today than pre-covid? Marcoeconomics
Realtors and landlords file suit to block Orange County's rent stabilization referendum. Microeconomics
Two Types of Analysis
Normative Economics: value laden analysis based on one's opinion or subjective values (cannot be
proved or disproved)
Positive Economics: testable analysis based upon objective facts (able to prove or disprove)
Policy differences among economists arise from either:
Positive disagreements (about the outcome of different policies)
Differences in values (how these outcomes are evaluated)
Focusing more on positive statements because we all will not agree with the same things
Positive or Normative ?
- GDP fell as Covid rates increased(positive)
- The government should forgive the first $50,000 of college debt (normative)
- Inflation has gotten out of control (normative)
- The average price of groceries has risen 5% in the last month. (positive)
Notes Page 2
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