ECON 10a Lecture Notes - Lecture 2: Opportunity Cost, Super Bowl, Absolute Advantage
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5 Feb 2017
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Types of disagreements btwn econ policy advisors. Agree about the facts but disagree about what to do. Employers might respond to minimum wage raise, by employing less people. Therefore, minimum raise up = minimum wage jobs down. Two economists disagree on the facts of what minimum wage increase would do. A = reduce minimum wage jobs by 2% B = reduce # of minimum wage jobs by 30% They agree on the facts, c & d think raise in min. Wage = reduce # of minimum wage by 11% C = raise it, the families who get better pay will be better off. D = don"t, what about the 11% of the people who will lose their jobs. When economists disagree they don"t necessarily mean they disagree on how the economy works, they many be having a normative disagreement. Economic knowledge can eliminate positive disagreements but not normative disagreements.
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