ECON 1132- Final Exam Guide - Comprehensive Notes for the exam ( 95 pages long!)
30 Nov 2017
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Document Summary
Employ the scientific method by dispassionately developing and testing of theories about how the world works. Policy advisors: try to improve the world. Use models to study economic issues: highly simplified representations of the issues. Shows how dollars flow through markets among households and firms. Firms: buy/hire factors of production and use them to produce/sell goods and services. Households: own the factors of production, own capital or land and rent it to firms, buy and consume goods and services based on the money they earn selling factors of production. Green is dollars flowing, red is goods, services, land, and work. Households provide work or land and receive money, firms use the work or the land to produce something and sell it back to the households. Graph that shows combinations of output that the economy can possibly produce given available factors of production and technology. Beyond frontier: impossible, need more labor hours.
