ECN 104 Lecture Notes - Lecture 2: Opportunity Cost
17 Oct 2016
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Document Summary
If you have a text book, then you can find the code to register in launchpad. Models: simplified representations of real life situation that is used to better understand real life situations. Creates real but simple economy (e. g. cigarettes in world war ii prison camps. Simulating an economy on a computer (e. g. tax models, money models, etc. ) The (cid:862)other things equal(cid:863) assumption means that all other relevant factors remain unchanged. Resources are scarce so economies face trade-offs (principle #1 in chapter 1) To think about these trade-offs economists use a simple model known as the production. Simplification: imagine canada is one-company economy (bombardier), which can produce two goods (train and jets) We can then analyze feasibility, efficiency (in production), opportunity cost, economic. A is efficient because the only way it can make more trains is by giving up less jets. B is efficient also because if you want to produce any more jets, you have to give up some trains.
