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Canada (162,338)
Economics (1,074)
EC120 (348)
Chapter 2

CHAPTER 2 NOTES.docx

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Department
Economics
Course
EC120
Professor
petersinclair
Semester
Fall

Description
CHAPTER 2 NOTES The economist as scientist  Economist have two roles; o Social scientist; provide explanations o Policy advisors; try to improve the theories  A social scientist uses the scientific method ; the dispassionate and testing theories about how the world works Assumptions and Models  Assumptions simplify the real world and make it simpler to understand  Models are simple representations of more complex reality The production possibilities frontier (PPF)  Means; a graph that shows the combination of two goods the economy can possibly produce given factors of production and the available production technology  The economy can produce at any point inside or on the graph, but not outside as it does not have enough factors of production to support that outcome. Points under the PPF could be due to unemployment, etc and is inefficient  With additional resources or technology, the graph can move outward Shape of PPF  it can be straight or bow-shaped, depends on the opportunity cost as the economy shift resources from one industry to another
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