Econ 1A Economics how people choose to use the scarce resources Microeconomics individual decision makings Macroeconomics economic aggregates outputs unemployment inflation on a national scale Positive economics studies decisions objectively Normative economics policy economics evaluates whether decisions are good or bad May prescribe courses of action Themes 1 2 3 4 5 6 7 Markets work in most circumstances Business cycles shape economy in short and medium term In short term trade off between inflation and unemployment Phillip s curve not in long term At least some govm t policies seems to aid in smoothing the business cycle Productivity shapes long term economic outcomes International trade is beneficial Incentives work a Rational Actor Paradigm fundamental assumption in economics b Human beings act rationally optimally and self interestedly 3 principal variables unemployment inflation output what determines these things and can we have any control over them Late 18th early 19th century was period of massive economic change called Industrial revolution Increases in productivity of agriculture new manufacturing technologies development of more efficient means of transportation Economic Development the field of economics that deals primarily with the problems faced by low income countries Public Economics examines the role of government in the economy Industrial Organization focuses on the structure and performance of industries and firms within an economy Comparative Economic Systems this field examines the way alternative economic systems function Efficiency providing what people want at minimum cost Fallacy of composition erroneous belief that what is true for an individual is necessarily true for the group as a whole Post hoc ergo propter hoc a common error made in thinking about causation after this therefore because of this Equity fairness Efficient Market everyone has same information as you do so you must make your decisions quickly Open market a market which is widely accessible to all investors or consumers Closed market a market where a supplier deals only with one agent or distributor and does not supply any others directly
View Full Document
Unlocking...