ECON 1BB3 Lecture Notes - Scientific Method

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

Document Summary

Express ideas in economics: english language, algebra/equations, diagrams/graph. Translate between each different form of communication. People buy less coffee when the price of coffee rises. Science = scientific method: observe, theorize, test theory. Micro: individual household and firms and how they interact. Macro: economy-wide phenomena such as interest rates, unemployment, money and growth. Efficiency is the size of the pie. Equity is how the pie is divided. To increase efficiency, have to give up equity (in market economy) Need this trade off because if people know they will get equitable share regardless, they wont work hard. Normative: the world as it should be" make a judgment based on your values.