Name: ECONOMICS CH. 1 SUMMARY NOTES
Date: 05-09 Feb 2018 Module: Introduction to Microeconomics Score: _______
Guided Reading
Questions
WHAT ECONOMICS IS ABOUT
Write response directly across from the
question in your notes.
Notes (Responses to Guided Reading Questions)
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Take sufficient notes with selective (not too wordy) & accurate paraphrasing to answer guided
reading questions.
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Explain what economics is about
Define economics
Define the important concept of opportunity cost
Describe a production possibilities curve or frontier
Distinguish between microeconomics and macroeconomics
Distinguish between positive and normative economics
Explain why economics is a social science
Identify some come mistakes in reasoning about economics
Learning Outcomes
Economics as a social science quantifying human choice
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What is economics about?
What problems is economics concerned?
What is positive economics?
What is normative economics?
Economics is about the allocation of scarce resources to satisfy unlimited wants.
Economics is therefore about scarcity, choice and opportunity cost.
Scarcity refers to the limited supply of resources.
Choice refers to the alternatives humans must make to satisfy their wants.
Wants are human desires for goods and services. Wants are unlimited.
Needs are necessities. They are essential for survival.
Demand is a want backed up by purchasing power.
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What are the 3 types of resources?
What are the 4 factors of production?
What model explains/illustrates scarcity,
choice & opportunity cost?
There are natural resources (e.g. agriculture), human resources (e.g. labour) & man-made
resources (e.g. machines).
The 4 factors of production are natural resources, labour, capital & entrepreneurship.
The production possibilities curve/frontier illustrates scarcity, choice & opportunity cost.
Cerebis paribus means all things being equal.
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What is the difference between
microeconomics and
macroeconomics?
What makes economics different from
other ways of thinking about human
choice?
What are the common mistakes in
reasoning about economics?
Summary of Section
Microeconomics concerns individual parts of the economy. Macroeconomics concerns the economy
as a whole.
The fallacy of composition assumes that the whole equals the sum of the parts.
Post hoc ergo propter hoc is the fallacy of consequence: i.e. “if this, therefore because of this”
Correlation and causation is an e.g. of fallacy of consequence. Correlation does not imply
causation.
In your own words and in complete sentences, write a 3 – 5 sentence summary paragraph. Your summary should cover the main concepts of the notes
and include adequate details to answer the section’s guided reading questions.