ECN 104 Lecture 2: ECN 104 - Lecture 2 - How Economists Think
30 Oct 2015
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Document Summary
The role of assumptions: make it easier to simplify and understand the complex world art in scientific thinking is deciding what assumption to make. Tech: shows opportunity cost between two goods ( oc = # of goods lost / # of goods gained, points inside the curve are inefficient, you can produce more of the goods without sacrificing one or the other. Say there is a shift in technology advancement. Meaning we have enough technology to produce more computers per worker than before. Then the product possibility frontier will shift outward. Microeconomics: the study of how households and firms make decisns and how they interact in markets. Macroeconomics: the study of economy wide phenomena, including inflation. When economics are tyring to explain the world, they are scientists. When they are trying to help improve it they are policy advisers. Positive statements: the attempt to describe the world as it is.
