(1) Why is economics difficult?
- Express ideas in economics:
1. English language
- Translate between each different form of communication
Ex: When the price of coffee rise, people drink less coffee. Q^d c = 100 -2.3Pc
(2) Economics is a social science
- Science = use scientific method
Go back to theorize if test theory doesn’t work.
(3) Micro vs Macro
- Micro: individuals households & firms and how they interact
- Macro: economy-wide phenomena such as interest rates, unemployment,
money, and growth
(4) Efficiency vs Equity
- Efficiency is the size of the pie
- Equity is how the pie is divided
(5) Positive vs