ECON 1BB3 Lecture Notes - Opportunity Cost, Scientific Method, Autarky

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Express ideas in economics: english language (ex. People buy less coffee when the price rises: algebra / equations (ex. Quantity demanded = 100 0. 30 pc: diagram / graph. Translate between each different form of communication: economics is a social science. > test theory (repeat theorize for new results: microeconomics versus macroeconomics. Microeconomics: individual households and firms and how they interact. Macroeconomics: economy-wide phenomena such as interest rates, unemployment, money, and growth: efficiency versus equity. Equity is how the pie is divided: positive analysis versus normative analysis. Normative: the world as it should be (in this case, we make value judgments) If you don"t need to make a value judgment, it"s a positive statement: model = simplification. Real variables are measured in physical units, nominal variables are measured in dollars. Stock variables are a snapshot at a point in time, flow variables are time intervals per month, minute, year.