ECON101 Lecture Notes - Lecture 1: Road Rage, Allocative Efficiency
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30 Jan 2018
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Lecture 1: some definitions, economics as a science. If benefits (x)> costs (x), then do activity x. If costs (cid:894)x(cid:895) >benefits (cid:894)x(cid:895), then don"t do activity x. Ex/ activity x: set the speed limit from edmonton to calgary to 10 km/hr. Costs: time, ~ gasoline, : political costs (angry population), economic losses (less traveling), , enforcement costs. road rage, Microeconomics: the study of the choices and actions of individual economics units such as households, firms, consumers etc. Macroeconomics: the study of the behaviour of the entire economy, including issues such as unemployment, inflation and changes in the level of national income. Economists don"t do equity: moral and political consequences - Positive economics: involves statements about what is and can be tested by checking the statements against the observed facts. Ex/ if the price of coffee rises, less people will buy coffee. Normative economics: involves statements about what ought to be. Depends upon values and beliefs and cannot be tested.
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