Some fundamental principles <br />Microeconomics versus Macroeconomics <br />Definition of economics. <br />Does this definition (problem) apply to everyone? <br />Key concepts <br />Opportunity Cost <br />What is the opportunity cost to you of taking this course? <br />Allocation mechanisms. <br />Economic systems and their allocation mechanisms. <br />How would you characterized the economic system of the U.S.? <br />The concept of relative price. <br />Why do economists insist on the concept of relative price? <br />3 functions of relative price. <br />Incentive function. <br />Productive factors (an aside) <br />Incentive function (cont.) <br />Signaling function of relative price. <br />Rationing function. <br />3 fundamental questions. <br />What to produce? <br />How to distribute output/income?
