ECON 2316 Chapter Notes - Chapter 1: Market Price
11 Sep 2017
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Micro theory chp 1: micro- deals with behavior of indiv units, also how units interact to form larger units. 1. 1 the themes of microeconomics: a lot of micro is about limits limited incomes, budgets, hours, also about how we can make the most of these limits allocation of scarce resources. Trade-offs: consumers limited incomes that can be spent or saved, workers whether and when to enter the workforce, must trade off working now (immediate income) for continued education (higher future income, firms financial constraints and production capacity restraints. Prices and markets: prices consumers face and prices firms face (wages, markets- collections of buyers and sellers that together determine the price of a good. Theories and models: explanations and prediction are based on theories in terms of a set of basic rules and assumptions, model- mathematical rep, based on econ theory. Positive vs normative: positive- analysis describing relationships of cause and effect, normative- opinionated what should or shouldn"t be.
