100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
ECN 201 Detailed Notes $11.99   Add to cart

Class notes

ECN 201 Detailed Notes

 2 views  0 purchase

This is a comprehensive and detailed note for principles of Microeconomics that makes emphasis on key concepts you need to know. *Essential Study Material!!

Preview 3 out of 23  pages

  • September 19, 2024
  • 23
  • 2021/2022
  • Class notes
  • Prof. ernest
  • All classes
All documents for this subject (10)
avatar-seller
anyiamgeorge19
Economics- study of how humans make decisions in the face of scarcity,

 Can be individual decisions, family decisions, business decisions, or societal decisions

Scarcity- human wants for goods, services, and resources exceed what’s available

 Ultimate scarce is time… everyone has 24 hours in a day to try and acquire the goods they want
 At any point in time there is only a finite amount of resources available

Division of Labor- the way a good or service is produced is divided into a number of tasks that are
performed by different workers, instead of all the tasks being done by the same person… idea by Adam
Smith

Specialization- allows workers to focus on the parts of the production process where they have an
advantage
 People have different skills, talents, and interests, so they will be better at some jobs than others
 Can be affected by geography
 If you specialize in a certain task, you will learn to produce more quickly and with a higher
quantity
 Specialization allows…

Economies of Scale- for many goods, as the level of production increases, the average cost of producing
each individual unit declines

The division and specialization of labor has been a force against the problem of scarcity



Microeconomics- the actions of individual agents within the economy, like households, workers, and
businesses

Macroeconomics- focuses on broad issues such as growth of production, the number of unemployed
people, the inflationary increases in prices, government deficits, and levels of exports and imports



Based on the Stanford reading, economics is everywhere. Throughout the reading, Stanford
shows examples of what economics is and where it is. For example, he says to just take a walk and you
will see economics. Stanford believes that economics is very straightforward and that everyone
participates in it. I think that Stanford is correct. Economics is everywhere whether if you have a job, how
much you’re paid, or even where you live. I agree with Stanford that economics is fairly simple.

Some features of neoclassical economics are that it focused more on the people rather than the
classes. Neoclassical economics also focused on market equilibrium at any point in time instead of the
evolvement over time. Additionally, the theorists answered economic questions through mathematical
techniques.



Economics- study of economic activity carried out by human beings in society

,Economic Activity- any activity that seeks to provide a person with the means to live life

- action that involves producing, distributing, or consuming products or
services

Examples: working, shopping, running a business, making something to sell, childcare,
the governments activities, cooking, volunteering, travelling, NOT LEISURE ACTIVITIES

Where can it occur?

- Workplaces, businesses, markets, at home, by the government, in the
community

Neoclassical economics- takes markets as a starting point even though there may be other locations for
economic activity
- Value of a commodity (price) depends on supply and demand: how much
someone wants it and is willing to pay for it, compared to how much is
available
- But sometimes markets don’t work how they’re supposed to leading to
market failure

Microeconomics- the actions of individual agents within the economy, like households, workers, and
businesses

Macroeconomics- focuses on broad issues such as growth of production, the number of unemployed
people, the inflationary increases in prices, government deficits, and levels of exports and imports



Chapter 2



Budget constraint- outer boundary of an opportunity set, indicates all the combinations

Opportunity set- identifies all the opportunities for spending within the budget

Marginal analysis- comparing the benefits and costs of choosing a little more or a little less of a good
Utility- satisfaction a good or service provide

Law of diminishing marginal utility- as a person receives more of a good, the additional (or marginal)
utility from each additional unit of the good declines

Sunk costs- costs that were incurred in the past and cannot be recovered, should not affect the current
decision

In neoclassical economics, demand and supply determine outcomes in the market
The fundamental Neoclassical Problem

 What determines demand and supply?

, o How consumers and producers choose to maximize their returns given scarce resources
with competing uses
o The problem… choice and decision making

Choice

 Sometimes a scarcity of resources so there are costs to making certain choices

Economics is about how economic agents might use our resources and make choices which will make
life better for ourselves



Defining Opportunity Cost

 Opportunity Cost- the highest valued next best alternative that is sacrificed to satisfy a want

Ceteris paribus- keeping things constant

True cost: direct cost + opportunity cost



Discussion Post:

Some examples of economic decisions I make in my daily life are if I should go to work, if I should
buy more clothes, and should I go out to eat instead of eating at home.
Recently, I made the decision to live on campus even though most of my classes are online. This was
an economic decision because I had to make a choice of whether I should sacrifice a college
experience or if I should risk getting sick while being on campus. I decided to live on campus because
I wanted to meet people and build connections.

When making an economic decision, I consider if the benefits outweigh the risks on my everyday life.
If the decision involves other people as well, I will take into consideration their views, so I am able to
make the best decision for everyone.

This is true because scarcity will always exist. Scarcity is necessary to organize economics on because
we are all experiencing the ultimate scarce which is time. When making an economic decision you
must thing about how much time is required for that choice. All resources that we value are scarce
whether its labor, land, money, tools, or other goods and services.



Section 2.2



Production Possibilities Frontier (PPF)- the problem of choice can be depicted for an economy
through this model
o All the points show the various combinations that an economy can produce

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller anyiamgeorge19. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $11.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

79271 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$11.99
  • (0)
  Add to cart