ECO 1102 Lecture Notes - Lecture 2: Scientific Method, Opportunity Cost
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25 May 2015
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Eco1102 - lecture 2 - thinking like an economist. As scientists, economists make positive statements --- trying to describe and explain the world as it is. To do so, they use the scientific method, the dispassionate development and testing of theories about how the world works. As policy advisors, economists make normative statements --- trying to prescribe how the world should improve it. While disagreement often arise, there are many propositions on which most economists agree. A model is a highly simplified representation of a more complicated reality. Assumptions simplify the complexity of the world and make it easier to understand. Showing how dollars flow through markets among households and firms. Factors of production --- land, labour, capital, natural resources. Households: own factors of production and sell / rent them to firms in exchange for income, and then buy and consume goods & services.
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21. The English word that comes from the Greek word for "one who manages a household" is
A- market
B- consumer
C- producer
D- economy
B- should be counted only to the extent that they are more expensive at college than elsewhere. C- usually exceed the opportunity cost of going to college. D- plus the cost of tuition, equals the opportunity cost of going to college. |
B- in most economies, wealthy people consume disproportionate quantities of goods and services. C- governments restrict the production of too many goods and services. D- resources are limited. |
B- markets guiding economic activity. Today many countries that did not have this system have implemented it. C- government guiding economic activity. Today many countries that had this system have abandoned it. D- government guiding economic activity. Today many countries that did not have this system have implemented it. |
B- we should agree with Senator Johnson. C- a good decision requires that we recognize both viewpoints. D- there are no tradeoffs between equity and efficiency. |
B- it does not matter if they charge $10 or $15. C- they would do better charging $15 than $10. D- they should raise the price even more. |
B- helps to explain how the economy is organized. C- incorporates all aspects of the real economy. D- Both (a) and (b) are correct. |
B- households provide firms with labor, land, and capital. C- firms provide households with output. D- firms provide households with profit. |
B- grew rapidly, due to several increases in the minimum wage during those decades. C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades. |
Question 30. 30. For economists, statements about the world are of two types: |
A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.