Class notes
Principles of Microeconomics (ECON200) Course Notes
This document features handwritten notes taken from a Winter 2021 semester microeconomics course at the University of Maryland.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
Seller
Follow
Content preview
Circular FlowModel
Households
Land,
Goods
and
services
bought
labor, and
Capital
Income
Spending
Markets
for goods
+
Markets for
the factors
of production!
Wages, rent,
Purchased at pro t
land, labor,
and capital
Firms
services
Revenue
Goods
and services
to be soll
Key:
→ ow of dollars
ow of goods
and services
fl fl fi
,Chapter ?
Economics & Life
Economics : The study of now people manage
resources
Microeconomics: the study of now individuals
and rms manage resources
Macroeconomics: the study of the economy as
a whole, and how policy-makes manage
growth and behavior of the overall economy
Rational behavior when people make
Choices to achieve their goals in the most
effective way possible given their resources
Four questions asked by economists:
- what are the wants and constraints of those
inuolued ?
what are the trade offs?
How will others respond?
resources being allocated in the best
way possible?
-Are
Scarcity: the condition of wanting
more
than we can get with available resources
Opportunity cost when you gain some you
lose some
Helps us understand trade offs
Marginal decision making: Describes the idea that
rational people compare addtional bene ts with
aditional costs
fi fi
,sunk cost : a cost that has already been
incurred and cannot be recovered
the
An incentive is something that causes people
to benave a certain way by changing
trade offs they face
(+) positive incentive Cincentive) makes
people more likely to do something
(-)
negative incentive (disincentive) makes
people less likely
some
,Chapter 2:
Specialization + Exchange
Production possibilities frontier (PPF) ; a line or
the possible combinations
of outputs that can be
produceol using all
corve that shows ali
available resources
Capital
SAQLA
-A-attainable & ef cient
- Baattainable but
inef cient
-c = unattainable
B
c
of a
Consumption
Casodes
-Two main factors that shift PPF are
number of workers t shanges in technology
Absolute advantage: the ability to produce more
good or service than others can with
a given amount of resources
Comparitive advantage : the ability to
prodeuge a good on service at a lower
opportunity cost than others
Specialization. spending all of your time
producing a speci c good
sains from trade the improvement in outcomes
that occurs when specialized prool ucens
exchange goods and services
fi fifi
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 phyliciachilds. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76462 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now