EC120 Chapter Notes - Chapter 2: Opportunity Cost
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EC120 Full Course Notes
Verified Note
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Document Summary
Economists try to address their subject with a scientist"s objectivity. The scientific method: observation, theory and more observation: They interplay with theory and observation like scientist an economists might look at the theory of inflation but unlike a scientists an economists cannot manipulate a nation"s monetary policy simply to generate data. Often economists use real life examples by looking at the economy when wars erupt in different areas. This allows economists to evaluate the economy in the past to better predict the future. Economists make assumptions to simplify the complex world and make it easier to understand. By looking at policy change the fluctuation of often standard prices helps to see their affects. Economists use models such as diagram and equations to see what is truly important as well it does not include every feature to focus on what"s important. A graph that shows the combinations of output that the available factors of production and the available production technology.
