[ECON 1000] - Final Exam Guide - Everything you need to know! (52 pages long)
29 Nov 2016
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Look to develop theories - casual observations of how things operate. Collect data - support or refute theory. Scientific method - observation, theory, more observations. Experiments are difficult because as an economist we must make do with what already existing data is there. Simplify what is a very complex world. Inflation is complex - use assumptions to understand most important factors. E. g international trade, 2 countries, 2 goods (in reality there is dozens of countries and countless goods) Make an assumption that will drive results and will lead to a conclusion. The art in scientific thinking is which assumptions to make. E. g impact of change in money on economy (prices can adjust) Built on assumptions to avoid irrelevant details. Assume two types of decision makers: households and firms. Firms use inputs to produce goods (and services) Inputs such as labour - hire workers, capital goods - building machinery, land.
