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WELCOME TO ARE 012. Introduction to Agricultural Economics With Herman Sampson. Microeconomics: ( the “trees”). Studies economic behavior of individual decision making units such as, Consumers Resource Owners Business Firms (producers) in a market economy
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Introduction to Agricultural Economics
Studies economic behavior of individual decision making units such as,
in a market economy
At times, micro will study economic behavior at the industry level
Studies the aggregate level of economic activity,
we will deal with some macroeconomic topics first, then concentrate on microeconomics
Normative: subjective, value laden, emotional
“What ought to be” economics
Rx and/or Policy oriented
Hear a bunch of normative economic statements during political elections
Positive: Objective, without emotion or value judgment!
“What is, What was, What will be” economics
Based on probability and statistical methods
Govt. tax and spend policies
2. Monetary Policy
Manipulation of the money supply by the Federal Reserve system to affect short-term interest rates and control inflation
When you produce or consume a commodity or service within your private property rights that imposes a cost on a third party not directly involved in the market transaction.
The cost imposed on the third party is very difficult (expensive) for the third party to recover
AKA a “Spillover Cost”
Laws are often enacted by legislative bodies that constrain private property rights in order to rectify negative externalities, or at least reduce the cost to third parties in recovering damages
Seat Belt Crack Down in N.C. (Click It or Ticket)
California Helmet Law for Motorcyclists
Imperial Foods of Hamlet, N.C. vs. Imperial Sandwich Co. of Goldsboro, N.C.
When you produce or consume a commodity or service within your private property rights that bestows a benefit on a third party not directly involved in the market transaction.
The benefit bestowed on the third party is very difficult (expensive) for the third party to recover
AKA a “Spillover benefit”