ECN 204 Chapter Notes - Chapter ch 1-2: Mira-Bhayandar Municipal Corporation, Potential Output
Document Summary
Micro: concerned w decision making of individuals (customers, households, business firms) Macro: examines performance and behaviour of economy as whole. Growth rate, inflation, unemployment key in macro economy. Behaviour of major economic aggregates such as the government, household, and business sectors . Positive economics: focuses on facts and cause-effect relationships, theory development/ testing. Normative economics: has value judgements about what the eco should be like. Points inside/under curve attainable, less total output, not all resources used. Points beyond curve, unattainable with current resources & technology. Law of increasing opp. cost: as production of particular good increases, opp cost of producing additional unit rises. Need to give up more to get 1 of another unit (give up 5 pizzas for 1 more robot) A fully employed economy must sacrifice some of one good to obtain more of another good.
