ECON 1BB3 Lecture Notes - Lecture 2: Autarky, Scientific Method, Opportunity Cost

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Specialization and trade are all around us b/w individuals within families, firms & consumers, canada & china. Simple model showing that trade can make us all better off than doing everything independently (ppf) Gains from trade: extra quantity that can be consumed when one trades w/ another. In isolation, a country must consume a point that"s feasible (inside or on ppf). When a country trades, it can specialize and the consumption point will differ fro production point. Express ideas in economics: english language people buy less coffee when the price of coffee rises , algebra/equations qdc = 1000-2pc, diagrams/ graphs. Science: use scientific method (observe, theorize, and test theory) When economists are trying to explain the world, they are scientists. When economists are trying to change the world, they are policy advisors. Positive statements: statements that attempt to describe the world as it is. (ex.