ECN 104 Study Guide - Midterm Guide: Rent Regulation, Dont, Price Floor
16 Nov 2016
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Microeconomics: study individual decisions and how they interact. Basic principles behind the individual choices: resources are scarce - the (cid:395)ua(cid:374)tit(cid:455) a(cid:448)aila(cid:271)le is(cid:374)"t la(cid:396)ge e(cid:374)ough to satisf(cid:455) all p(cid:396)odu(cid:272)ti(cid:448)e uses, a resource is anything that can be used to produce something else. You make a trade-off when you compare the costs with the benefits of doing something: the study of such decisions is known as marginal analysis. Interaction of choices my choices affect your choices, and vice versa is a feature of most economic situations. Pollution: some goods/services cannot be efficiently managed by markets. A model is a simplified representation of a real situation that is used to better understand real- life situations by: creating a real but simple economy. Cigarettes as currency in ww2 prison camps: simulating an economy on a computer. The (cid:862)othe(cid:396) thi(cid:374)gs e(cid:395)ual(cid:863) assu(cid:373)ptio(cid:374) (cid:373)ea(cid:374)s that all relevant factors remain unchanged. Resources are scarce so economies face trade offs. a model known as production possibilities frontier (ppf)
