Interview
The Cartoon Introduction to Economics (Volume 1: Microeconomics)
The Cartoon Introduction to Economics (Volume 1: Microeconomics) Complete notes from the book including definitions, keywords, visuals, and more.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
Content preview
MicroeconomicsNotes
PART
I
Chapter
1
-
Introduction
●
An
optimizing
individual
is
a
selfish
jerk
●
The
main
assumption
of
economics
is
that
every
person
is
an
optimizing
individual
●
These
individuals
hold
on
to
their
assets,
believing
they
will
be
worth
more
in
the
future
●
All
optimizing
individuals
are
created
equal
●
That’ s
because
they
are
simply
people
trying
to
satisfy
their
own
preferences
●
Economics
is
about
the
actions
of
optimizing
individuals
and
the
interactions
between
them
●
Micr oeconomics
one
optimizing
individual,
the
interactions
between
two
or
more
of
them,
and
the
interaction
with
tons
of
them
○
It
is
mainly
focused
on
optimizing
individuals
●
Macr oeconomics
looks
at
bigger -picture
issues
that
affect
the
whole
economy ,
like
inflation,
unemployment,
and
economic
growth
●
The
big
question
of
microeconomics:
under
what
circumstances
does
individual
optimization
lead
to
outcomes
that
are
good
for
the
group
as
a
whole?
○
In
other
words:
when
I
do
what’ s
good
for
me,
and
you
do
what’ s
good
for
you,
and
everyone
else
does
what’ s
good
for
themselves,
when
are
the
results
good
for
all
of
us?
●
In
some
situations,
optimizing
individuals
lead
one
another
down
the
road
to
ruin
○
Each
individual
is
trying
to
do
what’ s
best
for
them,
but
the
result
is
that
others
lose
○
This
is
the
idea
of
the
tragedy
of
the
commons
●
In
other
situations,
optimizing
individuals
work
together
so
well
that
the
results
seem
miraculous
○
The
most
miraculous
miracle
is
how
competition
between
profit-maximizing
sellers
leads
to
lower
prices
for
consumers ●
The
idea
of
the
invisible
hand
says
the
self-interest
can
serve
the
common
good
○
This
metaphor
was
coned
by
Adam
Smith
in
1776
●
In
contrast
to
the
pessimism
of
the
tragedy
of
the
commons,
the
optimism
of
the
invisible
hand
suggests
that
the
world
can
look
heavenly
●
The
true
miracle
of
the
invisible
hand
is
that
in
certain
situations
the
world
will
look
heavenly
even
if
it's
full
of
selfish
jerks
Chapter
2
-
Decision
Trees
●
There
are
all
kinds
of
optimizing
individuals,
but
ultimately ,
all
optimizing
individuals
have
one
common
thing:
they
look
at
the
available
options
and
pick
the
best
one
●
Studying
how
individuals
make
optimal
decisions
is
hard,
so
economists
use
decision
trees
to
map
out
the
available
options
●
Sunk
costs
are
expenses
that
you’ll
never
get
back
○
It
makes
no
sense
to
base
your
whole
decision
on
a
sunk
cost
○
Sunk
costs
appear
in
all
options
of
a
decision
tree
●
When
economists
start
comparing
very
similar
choices,
we
enter
the
realm
of
marginal
analysis
●
Marginal
analysis
means
comparing
similar
choices
○
This
generates
powerful
insights
and
allows
us
to
translate
plain
english
into
economic
gibberish ●
Sunk
costs
matter
before
they
are
sunk
●
Before
investing
in
research
and
development,
companies
consider
a
variety
of
costs
and
benefits,
including
R&D
costs
and
projected
revenue,
but
aget
R&D
costs
are
sunk
they
don’t
affect
pricing
decisions
●
Marginal
analysis
is
what
affects
pricing
decisions
●
Companies
can
use
marginal
analysis
to
make
pricing
decisions
Chapter
3
-
Time
●
Money
today
and
money
tomorrow
can’t
be
directly
compared
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller estebannacif. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.39. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83637 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now