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Download Basic Economic Relations
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Basic Economic Concepts • Ways to organize an economic system – Free markets – Government-run • Nature of decision making – Objectives – Constraints Tools of Economic Analysis • Economic rhetoric – – – – Words Graphs Tables/Spreadsheets Mathematical equations • Statistics and econometrics Concepts Used in the Periodicals We Read • • • • • • • Causality Ratios, decimals, percentages Averages and expected values Risk and uncertainty Absolute and relative magnitudes Reading and translating tables and charts Differential calculus to solve optimization problems Expressing Functional Relationships • Tables/Spreadsheets • Graphs • Equations – Linear, quadratic, multiplicative, exponential, logarithmic Graphing Data • Basics of graphing – Scatter diagrams, slope, intercept • Functional relationships – Dependent and independent variables • Time series relationships • Cross section relationships Marginal Analysis • • • • Profit maximization Total revenue maximization Cost minimization Break-even point Net Present Value • Discount rates • Probability and risk • Expected values
