ECO1104 Chapter Notes - Fall 2018 Chapter 1 - Planned economy, Sunk costs, Mae
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ECO 1104 Full Course Notes
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Explain the economic concepts of opportunity cost and marginal decision making. List the characteristics of a good economic model. Producers and consumer react quickly to price changes (family restaurant chains) Summary of intro: microeconomics is all about, p"s and q"s. Why are quantities what they are: use economic models as our primary analytic tool for economic events and behaviour. Not designed to imitate reality with exactness, but rather to describe the workings of the economy and to make predictions. By necessity, models involve gross simpli cations, and are based on assumption which are often unrealistic. Consists of premises, rather than unquali ed predictions. Ex: i am asked so often: what is going to happen to interest rates or exchange rates. If rates in the usa go up, then raes in. If (x), then (y: primary model for the course is the supply and demand model, illustration of what economists do, forecasting is a small part of it, apply microeconomic analysis.