ECON101 Lecture 2: Week 1/ Jan 13

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

= econ is a social science that seeks to explain how people act. = also uses models, theories, assumptions to describe how ppl behave. A model is a simpli ed description of the way things work. It"s not a complete description of every detail but rather a simple description that covers a wide range of possibilities. Models & theories are meant to provide an understanding & explanation (not assumptions). They also should be useful in predicting behaviour. Neoclassical paradigm a dominant model that is useful in predicting behaviour. According to this world view, consumers, workers, and rms all make a rational calculation as to what is in their own best interests. The aggregation of these rationally motivated behaviors is then used to make predictions about the quantity of goods that get produced and the prices at which they would be sold. Theories & models are tested against observed infos.