ECON 130: Lecture #2 (Economic Theory and Models) || with 100% Errorless Answers.
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ECON 130: Lecture #2
Institution
ECON 130: Lecture #2
How does economics fit in as a science? (give examples) correct answers Economics is a hard science and a soft science
hard (macro)-
calc
algebra
stats
physics
soft (mirco)-
psychology
marketing
economic inequality
game theory
why should you learn economics? (4) correct answers 1. to b...
ECON 130: Lecture #2 (Economic Theory and Models) ||
with 100% Errorless Answers.
How does economics fit in as a science? (give examples) correct answers Economics is a hard
science and a soft science
hard (macro)-
calc
algebra
stats
physics
soft (mirco)-
psychology
marketing
economic inequality
game theory
why should you learn economics? (4) correct answers 1. to be able to understand and forecast
economic cycles
2. to be able to understand human economic behavior
3. to better operate your company
4. to get a great job
What are the 3 economic fundamental concepts? correct answers opportunity cost, marginalism,
efficient markets
opportunity cost correct answers the best alternative that we forgo or give up when we make a
choice or decision
marginalism correct answers the process of analyzing the additional or incremental costs or
benefits arising from a choice or decision
efficient market (no free lunch) correct answers a market in which profit opportunities are
eliminated almost instantaneously
what are the 3 stats combined in the HDI? correct answers wealth, health and education
what determines the social status of a person in the US and south east asia? correct answers
his/her wealth
what determines the social status of a person in europe correct answers what she/he does
microeconomics correct answers the branch of economics that examines the functioning of
individual industries and the behavior of individual decision-making units (firms and
households)
, macroeconomics correct answers the branch of economics that examines the economic behavior
of aggregates - income, employment, output, and so on - on a national scale
what is a good way to see micro vs macro econ? correct answers micro sees the trees
(individuals, firms), macro sees the forest or economy as a whole (GDP, inflation,
unemployment)
Examples of Micro & Macro Concerns correct answers Micro
-Production
>production in individual industries and businesses (how much steel)
-Prices
>prices of individual goods and services (price of medical care)
-Income
>distribution of income and wealth (wages in the auto industry)
-Employment
>employment by individual businesses and industries (jobs in the steel industry)
Macro
-Production
>national production (total industrial output, GDP)
-Prices
>aggregate price levels (consumer prices, rate of inflation)
-Income
>national income (total wages and salaries)
-Employment
>employment and unemployment in the economy (total. number of jobs)
positive economics correct answers an approach to economics that seeks to understand behavior
and the operation of systems without making judgments (what exists and how it works)
normative economics correct answers an approach to economics that analyzes outcomes of
economic behavior, evaluates them as good or bad, and may prescribe courses of action (policy
economics)
theory
what is the purpose? correct answers a simple representation of how two or more variables
interact with each other (relationships among facts)
to take a complex, real-world issue and simplify it down to its essence
models correct answers a simplified representation of reality that is used to better understand
real-life situations (graphs)
variable correct answers a measure that can change from time to time or from observation to
observation
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