ECON-UA 1 Study Guide - Comprehensive Final Guide: Uric Acid, Demand Curve, Balanced Budget Amendment
29 Nov 2016
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Document Summary
Supply & demand example of a model, built to explain how prices are determined in many types of markets. Model | an abstract representation of reality (takes certain things from the real world and represents) models make 2 types of assumptions critical (matters for conclusions) simplifying (makes the model simpler, but does not a ect conclusions) Function | a rule relating one variable to other variables ie. i = annual income. ***ceteris paribus | all else the same meaning: a rise in education, should cause a rise in income (holding other variables constant) Endogenous variable | variable determined inside the model (in this case, annual income) Exogenous variable | variable determined outside the model (in this case, how much education, experience at job, alcohol&weed) taking those as given, to predict person"s income. Qd = # of oranges buyers would like to buy in nyc each period (ie. month) aggregated all oranges together.
