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Economic Principles

ECN220

Economic Principles
Truly, the mind has been studied for many years, and is an amazing organ. Specifically, the study of economics and what causes people to make the decisions they do. “The National Science Foundation (NSF)-funded scientist is looking directly at brain activity to see whether, and how, certain portions of the brain correlate with the values people express, and the choices they later make,” (Cimons, 2014). What is economics? Economics is a study of people’s decisions, how they come to make those decisions and why. The decisions can be for the family, personal, or business. Indeed scarcity plays an important role in the decisions that people make, and unfortunately is a way of life. Everyone has their own view of what type of scarcity that causes them to make their decisions, as it can be the amount of time, money constraints, or labor issues. How do Economists use theories and models to understand important economic issues? Economists use theories and models as a tool, or a way to determine an answer. “John Maynard Keynes (1883–1946), one of the greatest economists of the twentieth century, pointed out that economics is not just a subject area but also a way of thinking,” (Principles of Economics, 2014).

Identify each of the following topics as being part of microeconomics or macroeconomics: a. the impact of a change in consumer income on the purchase of luxury automobiles
Microeconomics
b. the effect of a change in the price of Coke on the purchase of Pepsi
Microeconomics
c. the impact of a war in the Middle East on the rate of inflation in the United States
Macroeconomics
d. factors influencing the rate of economic growth
Macroeconomics
e. factors influencing the demand for tractors Microeconomics f. the impact of tax policy on national saving
Macroeconomics

Which of

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