COMM 220 Lecture Notes - Lecture 1: Market Price, Ford Explorer, Market Basket
19 Oct 2015
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Document Summary
Microeconomics: study of the behaviour of individual economic units (i. e. , consumers, workers, firms, investors, etc. ) and the market that formed by these economic units. Themes of microeconomics: microeconomics deals with limits (e. g. , budgets, time, ability to produce) How do we allocate scarce resources: trade-offs. Workers, firms and consumers must make trade-offs. Individuals decide when and if to enter the work-force. Trade-offs of working now or obtaining more education/training. What types of products do firms produce: constraints on production capacity & financial resources create needs for trade-offs. How trade-offs are best made (theory of the firm): prices and markets. Trade-offs are often based on prices faced by consumers and producers. Workers made decisions based on prices for labor (i. e. , wages) Firms make decisions based on prices for inputs and on prices for the goods they produce. Centrally planned economies governments control prices. Market economies prices determined by interaction of market participants.
