ECON 201 Study Guide - Spring 2019, Comprehensive Midterm Notes - Inflation, Economic Equilibrium, The Takeaway
13 Feb 2019
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Document Summary
Micro economists are wrong about specific things and macroeconomists are wrong about things in general. Macro focuses on bigger picture stuff that affect the whole economy such as inflation, unemployment, and economic growth. Econ is the study of how people use resources and respond to incentives. People have unlimited wants in a world of limited resources. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their reward to their own interest. The unobservable invisible market force that creates a benefit but is done in the self-interest of an individual. Got to make money to pay people, build companies and buy stuff. It all builds and comes down to supply and demand and how to set prices to maximize profits. Have an abundance of resources- land, labor, and capital. But not unlimited, every decision has a trade-off no such thing as a free lunch.
