ECON 1BB3 Lecture Notes - Scientific Method

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

Document Summary

Experiment: microeconomics vs. macroeconomics, microeconomics: individual households & firms and how they interact, macroeconomics: economy wide phenomena such as interest rates, unemployment, money and growth, efficiency vs. equity, efficiency is the size of the pie. Making a bigger pie with the same ingredient: equity is how the pie is divided, positive vs. normative analysis, positive: describe the world as it is. Capital stock (amount of infrastructures) is a stock variable. Newly invested buildings subtract the buildings torn down is a flow variable. A flow variable is built on the stock variable. Households provide labour, land and etc to firms. ($ income) Theoretically, the money in the top half and bottom half will stay the same if no other organizations are involved. What is more dangerous, a gun or a swimming pool: refer to statistics: in the us, one child drowns for 11,000 residential pools. One child is killed for 1,000,000 households with a gun.