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Microeconomics Unit 2.

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Presentation on theme: "Microeconomics Unit 2."— Presentation transcript:

1 Microeconomics Unit 2

2 Microeconomics Definition: choices made be two different groups to satisfy unlimited wants and needs with limited resources 1- Individuals and Households 2-Businesses How do you think Macro is different from Micro? In other words, whose choices do we study in Macro that we don’t study in Micro? Topics to be discussed Circular flow Supply Prices Market structure Business organization

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4 Econoland Activity

5 From the National Council for Economic Education
People respond to incentives. Households have incentives to provide resources to businesses to receive income in return. They then have incentives to use their income to purchase goods and services to satisfy their wants. Businesses have incentives to earn profits and, therefore, to produce the goods and services that consumers want. To produce goods and services, businesses need to purchase resources from households. The circular-flow model and the simulation in this activity helps demonstrate these important relationships.


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