EC120 Lecture Notes - Lecture 2: Scientific Method, Opportunity Cost, Demand Curve
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EC120 Full Course Notes
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Document Summary
Economists employ the scieniic method, the dispassionate development and tesing of theories about how the world works. Used to generate evidence to explain the world. Economists pay close atenion to natural experiments ofered by history: policy advisors. Use the best generated evidence to inform policy development. Posiive claims that atempt to describe the world as it is vs. normaive claims that atempt to improve the world and where it should be. Key diference between posiive and normaive is their validity. An economist might evaluate posiive statements through research and facts while for normaive, it requires values. When economists are trying to explain the world, they are scienists. When they are trying to help improve it, they are policy advisors. Simplify our complex world, making it easier to understand. To study internaional trade, assume two countries and two goods. Most assumpions are unrealisic, but simple to learn and provide useful insights about the.
