EC-0005 Lecture Notes - Lecture 1: Spring Break, Opportunity Cost, Gallows
28 Jan 2018
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Document Summary
1. 1 the scope of economics: economics is all about choice. Scarcity - is the situation of having unlimited wants in a world of limited resources. Economics - is the study of how agents choose to allocate scarce resources and how those choices affect society. Positive economics - is analysis that generates objective descriptions or predictions, which can be verified with data. In other words ; describes what people actually do. Normative economics - is analysis that recommends what an individual or society ought to do. Microeconomics - is the study of how individuals, households, firms and governments make choices, and how these choices affect prices, the allocation of resources and the well-being of other agents. The economic system is in equilibrium when each agent cannot do any better by picking another course of action: empiricism - is analysis that uses data - evidence- based analysis.
