ECON 208 Study Guide - Midterm Guide: Demand Curve, Inferior Good, Marginal Cost

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Alex Hale

Document Summary

Production possibilities boundary (ppb) if the economy grows, the boundary pushes outward (and vice versa) the slope is negative due to the principle of opportunity cost. Three pure types of economic systems: traditional, command, free-market. In practice, every economy is a mix of these three. Chapter 2 economic theories, data, and graphs. Normative statements: depend on value judgments and opinions they cannot be settled by recourse to facts: e. g. (cid:862)the go(cid:448)e(cid:396)(cid:374)(cid:373)e(cid:374)t ought to t(cid:396)(cid:455) ha(cid:396)de(cid:396) to (cid:396)edu(cid:272)e u(cid:374)e(cid:373)plo(cid:455)(cid:373)e(cid:374)t. (cid:863) Positi(cid:448)e state(cid:373)e(cid:374)ts: do(cid:374)(cid:859)t i(cid:374)(cid:448)ol(cid:448)e (cid:448)alue judg(cid:373)e(cid:374)ts: statements about what is, was, or will be, e. g. (cid:862)a(cid:374) effe(cid:272)ti(cid:448)e (cid:449)a(cid:455) to (cid:396)edu(cid:272)e u(cid:374)e(cid:373)plo(cid:455)(cid:373)e(cid:374)t is to (cid:396)edu(cid:272)e u(cid:374)e(cid:373)plo(cid:455)(cid:373)e(cid:374)t i(cid:374)su(cid:396)a(cid:374)(cid:272)e (cid:271)e(cid:374)efits. (cid:863) Economists often disagree with each other, usually over normative statements. No matter how unlikely a theory is, some confirming evidence can probably be found: that does(cid:374)(cid:859)t (cid:373)ake it a sou(cid:374)d theo(cid:396)(cid:455)! Positive correlation: x and y move together.