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Lecture 2

Economics 1021A/B Lecture Notes - Lecture 2: Technological Change, Demand Curve, Comparative Advantage

Course Code
ECON 1021A/B
Michael Parkin

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Econ 1021A, Lecture 2, Wednesday, September 23, 2015
Using Graphs, The Economic Problem, How Prices and Quantities are Determined (Demand and Supply)
Economic Thinking
Expenditure, Income and the value of production
Living standards and productivity growth
Inflation: a money problem
Unemployment: Productive and wasteful
What Economists Do
Normative statements
What should be
Positive statements
What is
Can be proven true or false
We will be focusing only on positive statements
Observation and measurement
Model building
Ceteris paribus – other things being equal
Testing models
Graphing Data
Graphs represent a quantity as a distance on a line.
The x-axis runs horizontally.
The y-axis runs vertically.
The origin is their intersection.
Points can be identified by a pair of coordinates.
Points show relationships between 2 quantitative variables.
Four Patterns to Watch For:
Variables that move in the same direction. (Positive relationship) x and y
move positively at the same time
Variables that move in opposite directions. (Negative relationship) as x
and y move in opposite directions
Variables that have a maximum or a minimum. (parabolas)
Variables that are unrelated. (we don’t care about these)
Calculate the slope of a line
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