Mr Peter W

Topics: Economics, Economic system, Marginal utility Pages: 3 (369 words) Published: April 16, 2014
Global Economy Lecture 1
Matt Larkin

Macroeconomics – 2nd edition = “ipad on front cover” - hubbard garnet Louis o’brien.

Consultation on Monday (b4.06), wednes and Thursday
Lb Thursday at 3pm for a support tute.

15% online test
25% individual written assignment – due on 12th may
‘’income lab’’ – practice q’s online only if bought new copy of book 60% final exam. (hurdle)

Deakin referencing; reference Harvard
- go to deakin library site

Topic 1

Market – a group of buyers and sellers of a good or service and the institution or arrangement by which they come together or trade.

3 key ideas

1. people are rational
2. respond to economic incentives
3. optimal decisions are made at the margin.

Marginal analysis; Analysis that involves comparing marginal benefits and marginal costs.

Optimal - outcome achieved is the best possible outcome given the resources of the buyers and sellers. No outcome can be better without making someone else worse off.

Margin –

Optimal decisions are made at the margin
the more you have of something the less you are willing to pay for of the same item.

Scarcity and Trade-off’s

Resources (define)

Trade-off; the idea that because of scarcity, producing more of one good or service mean producing less of another good or service. Weigh up the decisions.

2. how will the goods be produced?

4. should we leave these decisions upto the market?

Consumer sovereignity – consumer is king

Modern mixed economy –

Efficiency and equity

Allocative efficiency

Dynamic efficiency

Economic hypothesis – may be incorrect or correct
Developing a model

3. Use economic date to test a hypotheses –
4. revise model

Normative (how the world ought to be) and positive analysis (how it actually is)


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