EC120 Chapter Notes - Chapter 2: Eurocopter Ec120 Colibri, Scientific Method
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EC120 Full Course Notes
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Ec 120 chapter 2: thinking like an economist. Assumptions in economics: economists make assumptions to make data easier to comprehend, much like in physics, e. g. When studying international trade, we assume that the world only has two countries which produce only two goods. The circular-flow diagram: circular-flow diagram: a visual model of the economy that shows how dollars flow through markets among households and firms, firms produce goods and services using inputs (factors of. Moving to another point along the ppf requires giving up 200 computers to get 100 cars. Microeconomics: the study of how households and firms make decisions and how they interact in markets. Macroeconomics: the study of economy-wide phenomena, including inflation, unemployment and economic growth. (e. g. Positive vs. normative: positive statements: claims that attempt to describe the world as it is. Can be confirmed or refuted by examining evidence. (e. g. Minimum-wage laws cause unemployment: normative statements: claims that attempt to prescribe how the world should be.
