Economics Lecture
ECMB02 - TOPIC 1 INTRODUCTION & REVIEW
1. Introduction 2. Review of Market Demand & Supply 3. Math Review
ECMB02_Topic1_Overheads
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1. Introduction
ECMB02_Topic1_Overheads
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What we will Learn in this Course 1. what influences people’s decisions about what and how much to consume? 2. what influences firms’ decisions about what and how much to produce? 3. how are product prices determined? 4. how to think about/solve economic problems that you can use in later courses and throughout your careers Learning Techniques 1. mathematical models quick and general predictions 2. worked mathematical examples & exercises 3. some classroom demonstrations
ECMB02_Topic1_Overheads
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Things to Keep in Mind 1. predictions from mathematical models are “qualitative” ( up/down, more/less) & sometimes no prediction 2. models need to be tested against real data … this is often difficult work and it can take decades for academic consensus to be reached … we study only well-established models in this course
3. price theory guides management intuition,
but managers also need to study their market to make quantitative predictions e.g. if increase price by 5%, how many fewer of our cars will be sold?
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Important Terms and Concepts price theory = microeconomics study of behaviour of individual economic agents such as individuals, households, firms, unions, governments market the meeting of buyers and sellers for the potential exchange of goods and services e.g. product market such as clothing or hairdressing e.g. factor market such as labour or machinery equilibrium a situation where every economic agent is doing the best they can for themself and so does not want to make different choices
ECMB02_Topic1_Overheads
5
resources the land, labour, raw materials, and machinery used in the production of goods and services resource allocation how society decides to allocate its scarce resources, i.e….. how it decides what
1. Introduction 2. Review of Market Demand & Supply 3. Math Review
ECMB02_Topic1_Overheads
1
1. Introduction
ECMB02_Topic1_Overheads
2
What we will Learn in this Course 1. what influences people’s decisions about what and how much to consume? 2. what influences firms’ decisions about what and how much to produce? 3. how are product prices determined? 4. how to think about/solve economic problems that you can use in later courses and throughout your careers Learning Techniques 1. mathematical models quick and general predictions 2. worked mathematical examples & exercises 3. some classroom demonstrations
ECMB02_Topic1_Overheads
3
Things to Keep in Mind 1. predictions from mathematical models are “qualitative” ( up/down, more/less) & sometimes no prediction 2. models need to be tested against real data … this is often difficult work and it can take decades for academic consensus to be reached … we study only well-established models in this course
3. price theory guides management intuition,
but managers also need to study their market to make quantitative predictions e.g. if increase price by 5%, how many fewer of our cars will be sold?
ECMB02_Topic1_Overheads
4
Important Terms and Concepts price theory = microeconomics study of behaviour of individual economic agents such as individuals, households, firms, unions, governments market the meeting of buyers and sellers for the potential exchange of goods and services e.g. product market such as clothing or hairdressing e.g. factor market such as labour or machinery equilibrium a situation where every economic agent is doing the best they can for themself and so does not want to make different choices
ECMB02_Topic1_Overheads
5
resources the land, labour, raw materials, and machinery used in the production of goods and services resource allocation how society decides to allocate its scarce resources, i.e….. how it decides what