ECONOMICS 1: Microeconomics

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ECONOMICS 1 Microeconomics

• Alanna Holowinsky
• Room E316-A
• Phone [phone]
• Email aholowinsky_at_rrc.mb.ca

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Economics The study of the production
and distribution of goods and services in
a society.
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CHAPTER 1Topics

• 1.2 Economic Way of Thinking
• 1.3 Theories, Principles, and Models
• 1.4 Micro v. Macro
• 1.6 Societys Economic Problem
• 1.7 Production Possibilities Model

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Economic Way of Thinking

• Scarcity Choice
• Rational behaviour
• Marginal Analysis

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Theories, Principles, Models

• Scientific method
• formulate problem, gather data
• test hypothesis
• lead to theories, principles, laws
• Ceteris paribus
• all else remains equal

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Microeconomics Individual units.
Macroeconomics The big picture.
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Basic Economic Problem

• Resources are scarce
• Wants are unlimited

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• Economic Resources
• Land
• Labour
• Capital
• Entrepreneurial ability

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A Simple Economic Model

• Inputs Outputs

ECONOMICSYSTEM
Land Labour Capital Entrepreneurship
Goods Services
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Quick Review

• Identify whether each of the following is land,
  labour, or capital
• 1. crude oil
• 2. forklift
• 3. accountant
• 4. retail store
• 5. coal
• 6. programming skills

land
capital
labour
capital
land
labour
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• Homework
• Read Chapter 1 Sections 1.1, 1.2, 1.3, 1.4,
  1.6, and 1.7