Microeconomics - 1.1

Economics as a Social Science: Studies human behavior and choices due to scarcity.

Not Business/Finance: Aims for societal welfare maximization.

Micro vs. Macro Economics:

• Microeconomics: Focuses on individual and firm decisions (e.g., supply/demand, market equilibrium).

• Macroeconomics: Examines economy-wide phenomena (e.g., GDP, inflation, unemployment).

Unit 1 Overview:

1. Economic Growth in the Long Term: Effects and determinants of growth.

2. Malthusian Trap: Population dynamics affecting economic output.

3. Technological Innovation: Relationship between growth and technology.

4. Climate Implications: Industrialization's impact on climate change.

Malthusian Trap:

• Historical view on limits of agricultural productivity and population growth.

• Improved output may lead to population growth, eroding living standards.

Evidence Supporting Malthusian Views:

1. Population Dynamics: Historical events affecting population and living standards.

2. Innovation vs. Population Growth: Technological gains can be offset by population increases.

Continuous Technological Revolution: Significant advancements and economic implications from industrialization.

Industrialization and Climate Change:

• Increased CO2 emissions lead to climate consequences.

• Mechanization alters capital and labor relationships.

Summary Points:

1. Understand the role of the Malthusian Trap in history.

2. Effect of the Industrial Revolution on productivity growth.

3. Recognize environmental costs of industrialization.

Upcoming Topics:

1. Opportunity costs, economic rents.

2. Comparative advantage and specialization.

3. Basic production functions.

4. Isocost curves.
   Prepare with readings from the CORE curriculum and standard economics materials.