Welcome to ECON 308 Managerial Economics Professor Tontz Instructor Richard Tontz Office JH 4253 Email richard tontz csun edu Phone 818 677 2433 Office hours Mon Wed 2 00 3 00pm Tues 3 15 4 00pm by appointment Class Website http www csun edu rlt50610 Index Card Front side lined ECON 308 TR 2 00pm Name underline what you go by Phone number Email Major option Hobbies Favorite book Back side Occupation if currently working Your expectations 6 years from now Any message you want to give me ECONOMICS Economics is a Science That analyzes how Individuals behave in a world of Scarcity Construction of Theory Abstractions Definitions Definitions Words to describe reality Children learn words in pairs in out up down left right Hot Cold Alternative perspective The world exists in a continuum Definitions break up the continuum into parts Red Yellow Orange Blue Green Red Orange Yellow Green Blue Indigo Violet Economic Analysis Looks at small degrees of Change Marginal Additional One more Marginal Value Additional Value of having one more Marginal Revenue Additional revenue from one more Marginal Cost Additional cost of one more Construction of Theory Abstractions Definitions Assumptions Implications Adoption of Theory A Good Is Anything That an Individual Wants to Have More Of at Zero Price Anything Material or Non material An individual wants Have More of At Zero Price Resource Anything that can be used to produce Goods Land all its attributes Labor People Capital Buildings Equipment Assumptions Humankind has unlimited wants Our resources are limited Scarcity Individually and as a Society we do not have enough resources to produce all the things we want Implications of Scarcity Choice people must choose which goods to acquire Economic Cost The Cost of any action is the personal value of the next highest valued alternative given up Competition We are in a state of competition for the use of resources Forms of Competition in Society Violence or Threat of Violence Social Political competition on the basis of some limited behavior or characteristic Economic Market competition based on offering the highest value in exchange Primary Social Goal Fairness Violence not fair Social political not fair Economic not fair Life is NOT FAIR But the market offers the broadest and most fair system What Economics Is About Microeconomics decisions of individuals and firms what to buy and what to produce Macroeconomics the whole economic system and the role of government Mechanisms of Choice Political our representatives make choices Economic market individuals and firms make choices based on relative prices about what to produce Circular Flow Diagram of the Exchange Economy Product Markets Goods Services s Goods Services s Revenue HOUSEHOLD FIRMS s s Income Inputs Resources Resource Markets Circular Flow Diagram of the Exchange Economy Households Decisions What to sell What to buy Assume Maximize Utility Firms Decisions What inputs to use What to produce Assume Maximize Profits Markets Factor Markets Product Markets Role of Money The medium of exchange Scarcity Society Choices What to produce Goal find the mixture of outputs that maximizes society s value How to produce Goal find the optimal mix of inputs to maximize technical output For whom to produce Who will get to consume the goods produced
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