ECON 1BB3 Lecture Notes - Lecture 2: Scientific Method, Microeconomics, Macroeconomics

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

Document Summary

Chapter 2 social science the study of people by scientific method observation, theorization, collection of data, testing of theory if data does not prove theory, go back to theorization. Microeconomics individual households/firms and how they interact. Macroeconomics- economy-wide phenomena ex interest rates, unemployment, money, growth. Efficiency and equity an example of trade-off efficiency is how much can be produced ie how big your pie is equity is how the produce is divided- ie how your pie is divided. Model diagram or equations to simplify ie make smaller scales, show only the main ideas and concepts to become comfortable with concepts. $ flow from households to firms in exchange for goods/services through the market - expenditures. Households own factors, these services flow from household to firms in exchange for $ - income. Goods/services flow from firms to households in exchange for $ Shows combinations of output that an economy can possibly produce given available factors of production and available tech.