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Economics 201H (Section 5) Introduction to Microeconomics

Economics 201H (Section 5) Introduction to Microeconomics. Prof. John Goddeeris Office: 106 Marshall Hall Hours: M W 1:00-2:30 and by appointment Phone: 353-6466 E-mail: goddeeri@msu.edu http://courses.bus.msu.edu/ECON/201/005H. Information about you.

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Economics 201H (Section 5) Introduction to Microeconomics

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  1. Economics 201H (Section 5)Introduction to Microeconomics • Prof. John Goddeeris • Office: 106 Marshall Hall • Hours: M W 1:00-2:30 and by appointment • Phone: 353-6466 • E-mail: goddeeri@msu.edu • http://courses.bus.msu.edu/ECON/201/005H EC 201H Fall 2001

  2. Information about you • Name (and what you would like to be called) • Class year (Freshman, Sophomore,…) • Where are you from? • What are you studying (if you know)? • Any previous Economics (including high school or AP)? EC 201H Fall 2001

  3. What is Microeconomics? • A Social Science • Social: About people and how they interact • Science: Develop theories to make predictions, test them against real data • What sets Economics apart? Scope and Method EC 201H Fall 2001

  4. What is Microeconomics? • Key concepts: Scarcity and Choice • Economics is the study of how society manages its scarce resources • Microeconomics starts with the individual • Usually assumes “rational” behavior EC 201H Fall 2001

  5. People face tradeoffs • The cost of something is what you give up to get it EC 201H Fall 2001

  6. Rational people think at the margin • People respond to incentives EC 201H Fall 2001

  7. Trade can make everyone better off • Markets are usually a good way to organize economic activity EC 201H Fall 2001

  8. Governments can sometimes improve market outcomes • A country’s standard of living depends on its ability to produce goods and services EC 201H Fall 2001

  9. In-Class Exercise: Let’s consider replacing the U.S. economic system with one where everyone is paid exactly the same salary. • Would you personally favor such a system? Explain. • What problems would exist? • Are there mechanisms that could be enacted to overcome these problems? • Who would benefit from this system? • What jobs would be hard to fill? EC 201H Fall 2001

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