UA EC 110 - Final Exam Study Guide (17 pages)

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Final Exam Study Guide



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Final Exam Study Guide

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Condensed notes from lectures 1-26


Pages:
17
Type:
Study Guide
School:
University of Alabama
Course:
Ec 110 - Prin of Microeconomics
Edition:
1

Unformatted text preview:

ECON 110 Final Exam Study Guide Lectures 1 26 Lecture 1 August 21 The big idea of this lecture was the Ten Basic Principles of Economics I Tradeoffs resources are limited and hence we must choose how to spend them II Opportunity Costs What you give up to get what you desire III Comparing and contrasting benefits to costs Specifically looking at whether the marginal benefits outweigh the marginal costs IV People respond to incentives when the benefits outweigh the costs V Trade can help everyone because it encourages competition and allows for specialization VI Markets can be used to organize economic activity In microecononmics the market that we study is the one that occurs between households and firms VII Governments can improve market outcomes The government can also pass laws to regulate the invisible hand VIII A country s quality of living is dependent on its ability to produce goods and services IX Inflation occurs when the government prints too much money X Society plays a balance game between inflation and unemployment Also termed equality and efficiency in economics this is the constant battle Other Big Ideas of Economics I II III Scarcity when society has less to offer than people are demanding Choices economics is all about the choices people make studying why they make them and attempting to influence them to make a choice that is beneficial to the economy Forces that affect the economy in the grand scheme of things but this is known as macroeconomics Lecture 2 August 26 Terms you should know scarcity tradeoffs decision opportunity cost incentives and choice Lecture 3 August 28 Circular flow diagram details the economic relationship between households and firms The different actors in this model are the firms the households and the markets The firms are entities that utilize factors of production in order to turn out goods and services they buy resources hire labor and convert resources into products for the households The households consume the goods



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