Econ 100A (Prof. Jim Campbell, Fall 2023)

Microeconomics

In this economics course, the main objective was to learn economic concepts and teach them to others.
Some main lessons was about utility model. Everyone has limited resources whether it's money, time, energy, etc and the goal is to maximize one's utility or one's happiness with the limited resources we have. A simple way is to find out what goods bring us the most happiness and maximizing them while accounting for diminishing returns.

The goal of economics is to be as efficient as possible.
We easily find that by deriving the utility function or profit function and find the point where it reaches 0 (or when the total utility/profit) stops increasing.

Another important lesson is opportunity cost. Each choice comes with a cost, the cost is not being able to do other choices. If I chose to study at UC Berkeley, there is still the opportunity cost of not studying at UCLA. Another example, is social media. If I scroll for an hour and feel little enjoyment. That is a waste because I could have been playing Tekken 8 for an hour and felt great enjoyment instead.

A side lesson is people like being certain over uncertain. I would rather take a guranteed $50 instead of a gamble of a 50% chance of winning $100 or nothing.

Lastly is game theory. This is behavioral economics.
We have at least two participants who make a choice. The outcomes for each participant depends on the choices made by all the participants. A classic example is traffic. I am a pedestrian and there is a car driving. If I stop and the car passes, they save time while I lose time. If I stop and the car stop, we both gain nothing. If I cross, and they cross, we both suffer. If I cross, and they stop, I gain time and they lose time. If I have the first choice, it would best for me to cross because I know the car will want to stop to avoid an accident.
However, in real life, that may not always be the case as the probability of losing my life over saving a few seconds may not be worth it. Plus, the driver may be intoxicated or tired so they may not be fully rational at the time as well.
The goal in game theory is to predict opponent's choices and use that information to make a choice to maximize rewards for oneself.