ECON 1BB3 Chapter Notes - Chapter 2: Umber, Normative Economics, Natural Experiment

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Hannah Holmes

Document Summary

Lecture three chapter 2: what is more dangerous, a gun or a swimming pool? (1) why economics is difficult: express ideas in economics, english language (understanding stories, and people, alegrba/equtions, diragramns/graphs. People who struggle with economics, are not people who are not good at math, they are the ones who cannot translate between these three forms of communication. When the price of coffee rises, people drink less coffee (2) economics is a social science. Science = use scientific method step to and tinker with our theory. Observe (instead of experiment like other scientists) Test theory (if supports theory then continue, if it doesn"t then go back to. Natural experiment: ex, seatbelt laws on injurys and deaths, law for it injuries decline (3) microeconomics vs. macroeconomics. Microeconomics: individual households & individual firms and how they interact. Macroeconomics: economy-wide phenomena such as interest rates, unemployment, money and growth (4) efficiency vs. equity.