ECON 105 1st Edition Lecture 1 Outline of Last Lecture I. Went over Syllabus and course outline Outline of Current Lecture II. Microeconomics A. Economics & Scarcity (What do they mean?)B. PPFC. LCAD. Four main factors of productionIII. Difference between microeconomics and macroeconomicsIV. TerminologyV. MarketsVI. FallaciesA. False cause fallacyB. Fallacy of compositionCurrent LectureEconomic & ScarcityEconomics – The study of how scarce resources are allocated among compelling ends/usersScarcity- resources are scarce when demand EXCEEDS supply*opposite of scarce resource is a free resourceSCARCITY (PPF) CHOICE SPECIALIZATION (LCA) EXCHANGEPPF – stand for Production Possibility FrontierLCA- Law of comparative advantage Four Main Factors of Production1. Land (rent)2. Labor (wages)3. Capital (interest)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. Unlike capital total supply of land is fixed4. Entrepreneurship (profits = sales-costs) * profits are residual rewards Micro/MacroeconomicMicroeconomics – analysis of smallMacroeconomics – analysis of large- Positive economics – “what is”- Normative economics – “what should be”Terminology Economic Agents: Buyers & Sellers and government Plant, Firm and IndustryMarkets- Are established arrangement where buying and selling of goods take place- Local vs national- Daily vs monthly- Goods (Walmart) and Factor (real estate agent, bank)FallaciesFalse Cause Fallacy = caution about cause & effectFallacy of Composition = caution about generalizationMain economic agentsBusiness enterprise (have many plants) but just one firm i.e McDonaldsAll firms in the same line-of-business (many firms) i.e gas stationsIndividual manufacturing