[ECON 101] - Final Exam Guide - Comprehensive Notes for the exam (23 pages long!)
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Economists terms . supply demand comparative advantage consumer surplus deadweight loss. Economist as scientific: the scientific method: observation, theory, and more observation. Usually have to make due with whatever data the world. Substitute natural experiments for laboratory experiments: the role of assumptions. Assumptions can simplify the complex world -- economists use them! The art in scientific thinking is deciding which assumptions to make (21: economic models. Omit many details to allow us to see what"s important. C. 3. a) in models assume away many details of economy that are irrelevant for studying the question at hand: 1st model: the circular-flow diagram. : visual model of economy that shows how dollars flow through markets among households and firms. 2 types of decision makers -- firms & households. D. 3. a) produce goods & services using factors of production (labor, land, buildings & machines (capital)) D. 4. b) own the factors of production consume the goods & services. D. 6. b) firms = buyers: 2nd model: the production possibilities frontier.
