modern principles of economics
Ch1 ideas
,
big
The
study of how people t entities
scare resources
make choices
about
allocating
macro economies
governments
:
+
micro :
personal choices
① incentives matter
- rewards and penalties that motivate behavior
A
good
institutions
aligh self interest w/ social interest
①-trade offs
ex ) .
Covid vaccine -
>
drug lag approval of
drug delayed-people die
:
drug loss
high testing costs mean product never
:
developed
③
*
opportunity cost :
value of next best alternative that
is forgone when adesicion is made
ex ) .
Attendingcollege
means
you lose the ability
a
limited resources
scarcity
:
a level time labor
on personal money
:
,
,
①* GOOD MARGIN EXAMPLE IN AUDIO
&trade makes better off
people
for people do
-increasing ability
want to
to
jobs
they
- trade for new resources +
comparitive
advantage
/
, ⑥ weath and economic
growth
economic creates wealth
growth
-
⑦ institutions matter
-
incentives to save and invest in
people ,
education,
heath
matter
-
even the
legal systems
⑧ booms and busts cannot be avoided ,
but can be
moderated
~
inflation is the rise of
prices caused mostly by
&
increases in
general
of
supply money
⑩ central
banking is hard
↳ too much
money= inflation
↳ not
enough money-economic slowdown
inflation :
2%
5%
unemployment :
, ch2-trade +
comparitive advantage
benefits of track :
off
① trade makes people better when
preferences differ
② increases
productivity thru
specialization
and division of
knowledge
③ increases
productivity thre comparative
advantage
↳ lower
opportunity cost
no trade= no
specialization
increased productivity
↳
people who specialize have more
knowledge obt
their field
Without specialization everyone ,
has the some
general knowledge
absolute
advantage
-
> produce the same
good
with fewer inputs (workers
comparative advantage ->
produce goods
for lower opportunity cost
shirts
computers
mexico 12 2
United states I
me
units of labor
needed
, comparative advantage
) each 21 units of labor
ex .
country has
it isossieent
C
-
↳ for every
27
12 toeve, I computer,
12 ,
~
Porter &
ources they could
8
reb 2- · make 6
I ↓
S S shirts
27 12
US mexico
production possibilities
mexico 2 12
US
E
27 =
S
J
T opportunity cost look
&
,
horizontally
could make ↓ computer e
They
& Shirts (or 2 com
,
P2s)
you're losing
out on the
opportunity
Tmakeshirt we
a se
Wages
are
higher in
higher productivity countries
Ch1 ideas
,
big
The
study of how people t entities
scare resources
make choices
about
allocating
macro economies
governments
:
+
micro :
personal choices
① incentives matter
- rewards and penalties that motivate behavior
A
good
institutions
aligh self interest w/ social interest
①-trade offs
ex ) .
Covid vaccine -
>
drug lag approval of
drug delayed-people die
:
drug loss
high testing costs mean product never
:
developed
③
*
opportunity cost :
value of next best alternative that
is forgone when adesicion is made
ex ) .
Attendingcollege
means
you lose the ability
a
limited resources
scarcity
:
a level time labor
on personal money
:
,
,
①* GOOD MARGIN EXAMPLE IN AUDIO
&trade makes better off
people
for people do
-increasing ability
want to
to
jobs
they
- trade for new resources +
comparitive
advantage
/
, ⑥ weath and economic
growth
economic creates wealth
growth
-
⑦ institutions matter
-
incentives to save and invest in
people ,
education,
heath
matter
-
even the
legal systems
⑧ booms and busts cannot be avoided ,
but can be
moderated
~
inflation is the rise of
prices caused mostly by
&
increases in
general
of
supply money
⑩ central
banking is hard
↳ too much
money= inflation
↳ not
enough money-economic slowdown
inflation :
2%
5%
unemployment :
, ch2-trade +
comparitive advantage
benefits of track :
off
① trade makes people better when
preferences differ
② increases
productivity thru
specialization
and division of
knowledge
③ increases
productivity thre comparative
advantage
↳ lower
opportunity cost
no trade= no
specialization
increased productivity
↳
people who specialize have more
knowledge obt
their field
Without specialization everyone ,
has the some
general knowledge
absolute
advantage
-
> produce the same
good
with fewer inputs (workers
comparative advantage ->
produce goods
for lower opportunity cost
shirts
computers
mexico 12 2
United states I
me
units of labor
needed
, comparative advantage
) each 21 units of labor
ex .
country has
it isossieent
C
-
↳ for every
27
12 toeve, I computer,
12 ,
~
Porter &
ources they could
8
reb 2- · make 6
I ↓
S S shirts
27 12
US mexico
production possibilities
mexico 2 12
US
E
27 =
S
J
T opportunity cost look
&
,
horizontally
could make ↓ computer e
They
& Shirts (or 2 com
,
P2s)
you're losing
out on the
opportunity
Tmakeshirt we
a se
Wages
are
higher in
higher productivity countries
