Micro Chap. 1

requires that an economy produces the highest combination of quantity (Q) & quality of g&s given it scare resources & Technology. Key words: highest combo of Q & quality with scare resources & Technology

Society decides(demand side): What?(input/Q) ->How?(process/how are the resources used? incl. Land, labor, capital ->For whom?(output) also affects the distribution of income & consumption of diff. Social classes

Production possibility frontier: (1) shows max. Q of goods that can be efficiently produced by an economy. (2) given it's technological knowledge and the Q of available inputs. Measurement of efficiency/ give efficiency a number.

Measurement of cost based on the value of the next-best forgone alternative. what you miss while doing the current thing; we have to decide because of scare recourses & given technology. Example: now studying, missing work experience; more butter or more guns? opportunity cost of a decision = value of g&s forgone (not in amount, but kind of missed experience)

change from a poor to a wealthy nation (higher input or technology = Eco. Growth) E.g. with new oil founding's

from hand-to-hand, no public goods e.g. tab water, private goods (food)

prosperous (florieren), higher income = consumption/more taxes = investment = growth

higher investment & higher consumption in long-term, whereas opportunity costs are high. E.g. build a university = high costs, could be spent on streets but in the long-term better educated society leads to a higher growth.

occurs when an eco cannot produce more of one good when producing more of another good.

Market fails to reflect true scarcities (water pollution by human = not same scarcity of clean water when it would be naturally given) E.g. (1) Technology forgetting (not use everything you could have) (2) bank failure (3) bankruptcy (4) reducing investments

scarcity & efficiency/free goods & economic goods/macro & micro/fallacy of composition/post hoc fallacy/ keep other things constant

three problems/alternative eco. Systems/command vs market/laisse faire/mixed economies

input & outputs/PPF/productive efficiency inefficiency/ opp. Costs

Assuming that what is true for part of a system is also true for the whole system. what is true for one system doesn't mean it is true for the whole system. E.g. saving and autonomy living is good = no eco. Growth if nobody spends money

Assuming that one event causes another simply because it happens first. A causes B, because A happened first

300ds and services that result from the production process.

:commodities or services, such as land, labor, or capital that are used by firms in their production processes.

A market economy in which the government has almost no role, no governmental influence

Branch of economics concerned with the behavior of individual entities such as markets, firms, and households. behavior of individual entities such as markets, households, firms

The branch of economics concerned with the overall performance of the economy. branch concerned with the overall performance of the economy

Goods that we value that are limited in supply

Commodities and resources that we value are limited in supply.commodities & resources that we value are limited in supply

Commodities and resources that are available without limit. without limits (air)

Using the economy's resources as effectively as possible to satisfy people's .needs .and desires..

Involves value judgments and ethical precepts about an economy. (we have norms, values) involves value judgements and ethical perceptions about an economy

Describes the facts and behavior of an economy.