ECN E102 Lecture Notes - Lecture 1: Demand Curve, Opportunity Cost, Free Good
Document Summary
Answered in the supply and demand framework that exists in the free-market. It is a social science behaviour of human beings. Forecasting is a small part of what economists do. Postulate: economists assume that we are all greedy/living in a material world without. Not only are humans greedy consumers, but also producers. If you want to consume, you have to produce. Human wants are partially satisfied by producing and consuming goods and. Production activities are supposed to fulfill our consumption wants; foundation. Theory of the firm: firms exist and make decisions in order to maximize of the supply curve services proof profits. Businesses interact with the market to determine pricing and demand and then allocate resources according to models that look to maximize profits. Consumer activities: foundation of the demand curve. Theory of the consumer: consumers seek to maximize their overall utility exchange. Exchange activities: how the two above interact. Market: where exchanges take place between producers and consumers.
