ECON 1BB3 Lecture Notes - Lecture 2: Opportunity Cost
16 Jun 2015
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ECON 1BB3 Full Course Notes
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The economist as a scientist: scientific method, role of assumptions. Two sectors of the economy: households and firms. Two markets: goods market and factor market, households, buyers in the goods market, sellers in the factor market. Firms: buyers in the factor market, sellers in the goods market. Inner flow: represents real flows, real flows = inputs and outputs, outer flow, represents nominal flows, nominal flows = flow of dollars. Please note the following about chapter 2 reading: page 25 - figure 2. 1 - circular flow diagram is slightly different than the circular flow. The markets for goods and services and the markets for factors of production are switched around: however, the same idea of the circular flow of an economy is relevant in both diagrams. Model: a description of how _____ and ______ work in some part of the economy, __________________________, used to ______ or __________ What is a market: a place where ______ and ______ come together.
