ECON 2010 1st Edition Lecture 1 Outline of Current Lecture I. Course ObjectiveII. Microeconomics vs. MacroeconomicsIII. Course PhilosophyIV. Course OutlineCurrent LectureI. Course Objective:The course objective is to learn about what output is produced, what input gets used up to produce it, and who gets the output in a country which uses an exchange system based on markets. The question that we are then faced with is, does the market system give an outcome that we like?Market: When goods change hands at voluntarily-agreed prices.Goods Market: The household will exchange payment in return for goods with the firm. For example, if you pay Safeway $100 for groceries you are the household that is receiving the good of groceries and Safeway is the firm that accepts your $100 as payment.Goods<--------------------------------------------- Household Firm--------------------------------------------->PaymentResource Market:The household will exchange their resources in return for payment from the firm. For example, if a professor gives his time to a university in exchange for money, then the professor is the household, his time is the resource, the university is the firm, and the money is the payment.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Resources<----------------------------------------------- Household Firm----------------------------------------------->PaymentNot all countries have “market economies” The USSR has a “command economy,” the US has a “market economy,” and Europe’s economy is somewhere in the middle. The US won the coold war due to having a market economy. Command economy: buyers and sellers trade goods as they are toldII. Microeconomics vs. MacroeconomicsMicro:Micro means “small.” Microeconomics starts with decisions of many small agents (households and firms), and sees how these come together to determine what happens. The question then remains, is this outcome “good”?Macro:Macro means “big.” Microeconomics deals with how total levels of output, unemployment, inflation, and trade-levels are related. The question then remains, how the government should stabilize the economy.III. Course PhilosophyPhilosophy: “I do it, you do it.” Students need to learn by doing and apply their economic knowledge to everyday life situations. IV. Course OutlineLook at players in a market:See how households (demand side) and firms (supply side) interact to determine what happens and if the outcome is