Basic Principles of Economics
Microeconomics vs. Macroeconomics
Definition of Economics:Micro vs. Macro
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Alright, so let's define economics now and then we'll compare micro economics, what we're learning in this course and macro economics. So economics is a social science that's focused on the choices made by individuals institutions and society under conditions of scarcity. So it's about choices under scarcity, right? Remember scarcity? Is this idea of having limited resources. We have unlimited wants, but we have limited resources. Um And when you think about economics, yeah, we're gonna be doing some math in this class. Did you feel that? I feel like when I said math there was like a collective shiver out there. Um Maybe it's just me, I don't know. Uh Yeah, so economics actually has a strong foundation in uh studying human behavior psychology. Um It's actually pretty interesting. So when we're doing micro economics, we're studying the choices that individuals and businesses make kind of on the day to day choices about setting prices, how a price change could affect supply and demand of a product. So, you know, if the price of cereal goes up, what's going to happen in the market, people will probably want less cereal, right? People might want to supply more cereal because the price went up. And that's also, you know, when we're thinking about prices, we're actually gonna deal with taxes to in this class and how taxes affect supply and demand as well. Another huge topic in this class is gonna be maximizing profit under different market structures. So we're gonna study monopolies, We're gonna study perfect competition, um stuff like that and how to maximize profit in these situations. Uh last is just operational stuff like knowing how many laborers to hire and what to pay them, Right? So these, you can see these are, you know, decisions made on a small scale compared to macro economics. We're studying the economy as a whole. So we're studying the nation's economy, the global economy, right? So much bigger ideas. We're gonna be studying recessions. You know, what, what causes a recession or a boom in the economy inflation? How does inflation affect interest rates, unemployment? Right. So you can see these issues are on a grander scale than what we'll be studying in this class.