Macroeconomics - Session 1 Notes

Instructor Introduction

• Instructor: Wes Moore
• Focus on making macroeconomics interesting and understandable

Session Overview

• Objective: Introduction to economics
• Key Topics:
  1. Definition of Economics
  2. Microeconomics vs. Macroeconomics
  3. Concept of Rational Self-Interest

What is Economics?

• Common Misconceptions: Complicated graphs, formulas, and definitions
• Underlying Principle: Getting the most out of what you have
• Example: Economy car (e.g., Mitsubishi Mirage)
  • Offers a lot for a little money

Formal Definition

• How people fulfill unlimited wants with limited resources
• Important Concept: Scarcity
  • Wanting more than what's available at zero cost
  • Resources like land, workers, and materials are limited but wants are unlimited

Application of Economics

• Individual Level: Budgeting personal income
• Family Level: Managing household resources
• National Level: Allocating country’s resources to fulfill needs and wants

Microeconomics vs. Macroeconomics

• Microeconomics: Study of small parts of the market
  • Individuals, families, or specific products (e.g., demand for Mountain Dew)
• Macroeconomics: Study of entire markets
  • National markets, entire economies

Rational Self-Interest

• Definition: People make rational decisions that make sense and are in their best interests
• Assumption in Economics:
  • People act logically (rationally) and in their own self-interest
  • Important for predicting economic behaviors

Example

• Purchasing a Camera:
  • Rational part: Choosing camera with better specifications
  • Self-interest part: Choosing the best price and availability for oneself

Major Players in Economic Decisions

• Individuals, business owners, governments, investors
• Always consider their rational self-interest when making decisions

Next Session

• Topics:
  • Economic systems
  • Key terms: Socialism, Capitalism

Thank you for attending Session 1!