ECON101 Lecture 3: ECON 101 Lecture 3 Economic Models

75 views3 pages
Verified Note

Document Summary

Main models: ppf, technical/allocative efficiency, absolute/comparative advantage, tariffs and international trade. Model the complex world with simplified representations. If economics mid-term = 50% of your final grade; biology mid-term = 10% of your final grade you should spend more time studying economics to maximize output. Ppf: given the resource base (capital, input, natural resources) and technology of a country, how much a country can produce. Blue line/ppf: the upper limit for scenarios that are possible. Technical efficient (getting all it can from the scarce resources available) The scenarios under the line are possible but not desirable. B is unattainable given the resources and technology. Answer: one cannot tell without more information. Link to the concept of allocative efficiency. Technology improvement (given the same resources) ppf shifts outward. We are good at different things/different specializations division of labour increase efficiency produce more. Economic efficiency: all resources are used to achieve the most output that is the best for the economy.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents