Economics
Hult
Managerial Economics
Don Uy-Barreta
Lecture notes – Week 1
Chapter 1 – Microeconomics: A Way of thinking about business (and life!!!)
The bottom line
Property rights are crucial to the efficient allocation of resources that are depleted or devalued in some way when used and when transaction costs are low. They can be a problem when transaction costs are high and the use of the resource does not deplete the resource or devalue it.
1) What is economics about?
a) What and how much to produce
b) How to produce it
c) For whom to produce it
What’s missing?
Example: 4 ways to use money
a)
b)
c)
d)
What does this show?
Conclusion:
2) Public property – tragedy of commons
Does this work?
How? (See attached article)
3) Private property – factors of production/resources scarcity
a. Argentina
4) What is a market?
a) Who benefits
b) Are there other dimensions which we should also consider?
a. Positive Externality
b. Negative Externality
5) What are entrepreneurs?
6) Why does scarcity exist? wants does NOT equal being satisfied
a. Frequency
b. Duration
c. Magnitude
d.
7) Macroeconomics is about what?
a. However some concepts can be used in both Microeconomics and Macroeconomics
i. For example taxes
Some Macroeconomics example
a) Although our coverage is concentrated in Microeconomics, why should managers also be educated/exposed to the Macroeconomy?
8) What is comparative advantage?
9) What does comparative advantage lead to?
Intro to the Production Possibility Curve
What does the curve show (It bows out because it shows ↑ marginal opportunity cost.)
a) What is the goal?
Steve Steve Sara Sara
Loaves of Bread Dozens of Cookies Loaves of Bread Dozens of Cookies
4 0 4 0
3 2 3 1
2 4 2 2
1 6 1 3
0 8 0 4
No trade
Loaves of Bread Dozens of Cookies
8 0
6 3
4 6
2 9
0 12
With Trade
Loaves of Bread Dozens of Cookies
8 0
Managerial Economics
Don Uy-Barreta
Lecture notes – Week 1
Chapter 1 – Microeconomics: A Way of thinking about business (and life!!!)
The bottom line
Property rights are crucial to the efficient allocation of resources that are depleted or devalued in some way when used and when transaction costs are low. They can be a problem when transaction costs are high and the use of the resource does not deplete the resource or devalue it.
1) What is economics about?
a) What and how much to produce
b) How to produce it
c) For whom to produce it
What’s missing?
Example: 4 ways to use money
a)
b)
c)
d)
What does this show?
Conclusion:
2) Public property – tragedy of commons
Does this work?
How? (See attached article)
3) Private property – factors of production/resources scarcity
a. Argentina
4) What is a market?
a) Who benefits
b) Are there other dimensions which we should also consider?
a. Positive Externality
b. Negative Externality
5) What are entrepreneurs?
6) Why does scarcity exist? wants does NOT equal being satisfied
a. Frequency
b. Duration
c. Magnitude
d.
7) Macroeconomics is about what?
a. However some concepts can be used in both Microeconomics and Macroeconomics
i. For example taxes
Some Macroeconomics example
a) Although our coverage is concentrated in Microeconomics, why should managers also be educated/exposed to the Macroeconomy?
8) What is comparative advantage?
9) What does comparative advantage lead to?
Intro to the Production Possibility Curve
What does the curve show (It bows out because it shows ↑ marginal opportunity cost.)
a) What is the goal?
Steve Steve Sara Sara
Loaves of Bread Dozens of Cookies Loaves of Bread Dozens of Cookies
4 0 4 0
3 2 3 1
2 4 2 2
1 6 1 3
0 8 0 4
No trade
Loaves of Bread Dozens of Cookies
8 0
6 3
4 6
2 9
0 12
With Trade
Loaves of Bread Dozens of Cookies
8 0