ECO 211 Lecture Notes - Lecture 2: List Of Fables Characters, Competitive Advantage, Ceteris Paribus

• School: University of Miami
• Department: Economics
• Course: ECO 211
• Professor: Lorca Maria

Document Summary

Scientific method: hard science, positive or normative statement, economic model factors, ceteris paribus, assumptions. Production possibility frontier (ppf: feasible and efficient, feasible but not efficient, outside the reach, economic growth shifts, opportunity cost. Trade and specialization: absolute advantage, opportunity cost, competitive advantage. Similar to hard sciences constructing a theory and testing it against reality: construct a theory (or hypothesis, design experiments to test the theory, collect data. Has to do with consumer behavior and usually doesn"t exist or isn"t reliable: revise or refute the theory based on evidence. Difference from hard sciences : economist"s lab is the world around us; firm and consumer behavior studied, not always able to design experiments, historical data often used. Positive statement- going to say what the economy is like; can be tested to be true or false. Normative statement- says how something should be or ought to be; cant be tested: politicians use this more.