EC120 Study Guide - Final Guide: Price Floor, Price Ceiling, Economic Equilibrium
30
EC120 Full Course Notes
Verified Note
30 documents
Document Summary
Economics: study of how society manages its limited resources. Microeconomics: branch of economics that looks at the behaviour and decision making of consumers and producers. Monopolies: productivity is the ultimate source of living standards, money growth is the ultimate source of inflation, society faces a short-run trade-off between inflation and unemployment. Can be scientists, as they generate evidence to explain economic theories. Can be policy advisors, as they generate evidence to inform on policy development. Assumptions: help simplify the world when stating an economic theory. Models: simple representation of a more complex reality, used to study economic problems. Graphs: economists often study 2-variable relationships, so graphs help represent these. Graph sho(cid:449)i(cid:374)g e(cid:272)o(cid:374)o(cid:373)(cid:455)"s produ(cid:272)tio(cid:374) possi(cid:271)ilities for 2 goods based on resources. Opportunity cost: what must be given up in order to get something. Shift along the curve, results in less of 1 good, more of another. Shifting the ppf curve: outwards: new resources, technology, increased labour.
