It has a detailed notes of the principle of Microeconomics based on G.Mankiw's book on the same name. It is the first chapter of Microeconomics courses in most of the universities around the world.It has all case studies and examples.
,This work is licensed under a Creative Commons-ShareAlike 4.0 International License
Original source: BCcampus OpenEd
http://open.bccampus.ca/find-open-textbooks/?uuid=ca7d2b03-11f0-49ed-8efb-
e7a5ac4f9cae&contributor=&keyword=&subject=Economics
,Contents
Preface ............................................................................................................................1
Additional Material for Instructors ........................................................................................3
Chapter 1 Economics: The Study of Choice .................................................................4
1.1 Start Up: Economics in the News .....................................................................................4
1.2 Defining Economics............................................................................................................5
LEARNING OBJECTIVES ....................................................................................................5
1.2.1 Scarcity, Choice, and Cost ......................................................................................5
1.2.1.1 Scarcity .........................................................................................................5
1.2.1.2 Scarcity and the Fundamental Economic Questions ..............................6
1.2.1.3 Opportunity Cost..........................................................................................7
KEY TAKEAWAYS ...............................................................................................8
TRY IT! ................................................................................................................8
Case in Point: The Rising Cost of Energy .......................................................8
ANSWERS TO TRY IT! PROBLEMS .................................................................10
1.3 The Field of Economics ....................................................................................................10
LEARNING OBJECTIVES ..................................................................................................10
1.3.1 The Economic Way of Thinking ...........................................................................11
1.3.1.1 Opportunity Costs Are Important ...........................................................11
1.3.1.2 Individuals Maximize in Pursuing Self-Interest .....................................12
1.3.1.3 Choices Are Made at the Margin .............................................................12
1.3.2 Microeconomics and Macroeconomics .............................................................13
1.3.3 Putting Economics to Work .................................................................................14
1.3.3.1 Careers in Economics ................................................................................14
1.3.3.2 Applying Economics to Other Fields ........................................................14
KEY TAKEAWAYS .............................................................................................19
TRY IT! ..............................................................................................................19
Case in Point: The Financial Payoff to Studying Economics .....................19
ANSWER TO TRY IT! PROBLEM .....................................................................20
1.4 The Economists’ Tool Kit ..................................................................................................21
LEARNING OBJECTIVES ..................................................................................................21
1.4.1 Models in Economics ............................................................................................22
1.4.2 Testing Hypotheses in Economics ......................................................................22
1.4.2.1 The All-Other-Things-Unchanged Problem ............................................23
1.4.2.2 The Fallacy of False Cause ........................................................................23
1.4.2.3 Normative and Positive Statements ........................................................24
KEY TAKEAWAYS .............................................................................................25
TRY IT! ..............................................................................................................25
Case in Point: Does Baldness Cause Heart Disease? ................................25
ANSWER TO TRY IT! PROBLEM .....................................................................26
1.5 Review and Practice .........................................................................................................26
Summary .........................................................................................................................26
PROBLEMS ......................................................................................................................27
, Chapter 2 Confronting Scarcity: Choices in Production ..........................................29
2.1 Start Up: Tightening Security at the World’s Airports .................................................29
2.2 Factors of Production.......................................................................................................30
LEARNING OBJECTIVES ..................................................................................................30
2.2.1 Labor ......................................................................................................................31
2.2.2 Capital ....................................................................................................................31
2.2.3 Natural Resources ................................................................................................32
2.2.4 Technology and the Entrepreneur ......................................................................33
KEY TAKEAWAYS .....................................................................................................33
TRY IT! ......................................................................................................................34
Case in Point: Technology Cuts Costs, Boosts Productivity and Profits ..........34
ANSWERS TO TRY IT! PROBLEMS .........................................................................35
2.3 The Production Possibilities Curve .................................................................................36
LEARNING OBJECTIVES ..................................................................................................36
2.3.1 Constructing a Production Possibilities Curve...................................................36
2.4 Comparative Advantage and the Production Possibilities Curve ...............................40
2.4.1 The Law of Increasing Opportunity Cost ............................................................42
2.4.2 Movements Along the Production Possibilities Curve ......................................44
2.4.3 Producing on Versus Producing Inside the Production Possibilities Curve ..46
2.4.3.1 Idle Factors of Production .........................................................................46
2.4.3.2 Inefficient Production ................................................................................47
2.4.3.3 Specialization ..............................................................................................50
KEY TAKEAWAYS .............................................................................................50
TRY IT! ..............................................................................................................51
Case in Point: The Cost of the Great Depression .......................................52
ANSWER TO TRY IT! PROBLEM .....................................................................52
2.5 Applications of the Production Possibilities Model ......................................................53
LEARNING OBJECTIVES ..................................................................................................53
2.5.1 Comparative Advantage and International Trade.............................................53
2.5.2 Economic Growth ..................................................................................................55
2.5.2.1 The Sources of Economic Growth ............................................................56
2.5.2.2 Waiting for Growth ....................................................................................60
2.5.3 Arenas for Choice: A Comparison of Economic Systems ................................60
2.5.3.1 Classifying Economic Systems ..................................................................61
2.5.4 Government in a Market Economy .....................................................................63
KEY TAKEAWAYS .....................................................................................................64
TRY IT! ......................................................................................................................64
Case in Point: The European Union and the Production Possibilities Curve .64
ANSWER TO TRY IT! PROBLEM .............................................................................66
2.6 Review and Practice .........................................................................................................67
Summary .........................................................................................................................67
CONCEPT PROBLEMS ....................................................................................................68
NUMERICAL PROBLEMS ................................................................................................70
Chapter 3 Demand and Supply ...................................................................................74
3.1 Start Up: Crazy for Coffee ...............................................................................................74
The benefits of buying summaries with Stuvia:
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
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
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 abhinabasamaddar. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.49. You're not tied to anything after your purchase.
