ECON-2006EG Study Guide - Quiz Guide: Co-Insurance, Ceteris Paribus, Coordination Game
7 Mar 2021
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Topic 2 technological change and economic growth. Context: recent, rapid, sustained increase in income and living standards due to technological progress, 200 years ago, these major changes started very suddenly. Economic models: map the economy depending on actions and interactions of millions of people, distinguish between essential, relevant features and unimportant details. Models omit many details: building a model. Capture the relevant elements for our question. Determine the outcomes of these actions -> an equilibrium: equilibrium of a model = situation that is self-perpetuating. Study what happens when conditions change: good models . Are clear (helps understanding the important aspects) Are useful (find ways to improve understanding of economy: key concepts. Incentives = economic rewards/punishments which influence benefits and costs of actions. Economic rent (reservation option) = benefit from option taken benefit next best alternative. Growth: industrial revolution 18th century in britain. Abundance of coal, access to colonies: the firm and its costs.
