ECON 1116 Chapter Notes - Chapter 2: Scatter Plot, Demand Curve, Ordered Pair
24 Aug 2016
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The only way to experiment is to do it with the real world, but this could lead to recession, costs of experimenting is too high: substitute for laboratory experiments e. i. Economists pay close attention to the natural experiments offered by history e. ii. Pay attention to the us responses and other country, as well as real life experiences and make inferences from that: the role of assumptions, assumptions a. i. Can simplify the complex world to make it easier to understand a. ii. Eg: assume there are only two countries in this world and can only buy and sell apples/oranges a. iii. Once you understand the simple model, you get a better understanding of the complex world: different assumptions b. i. To study short run or long run effects b. ii. 1. Short run temporary, how do you expect prices to change in a week b. ii. 1. a. b. ii. 1. b. Time period where decisions are made under b. ii. 2. constraints, cannot do whatever you want to.
