ECON 102 Lecture Notes - Lecture 2: Normative Economics, List Of Fables Characters, Invisible Hand
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ECON 102 Full Course Notes
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Additional benefit received from doing one more of something. Additional cost associated with doing one more of something. Economist use economic doles/theories to analyze difficult real-world situations in a simplified manner. Sometimes they need to be started from scratch. Developing a model: decide on assumption to include in the model. Relieve some complexity: formulate a testable hypothesis, use economic data to test hypothesis, revise the model if it fails to explain the data well, retain revised model to help answer future economic questions. Analysis that is concerned with what ought to be based on opinions/believes/ethics/morals/emotions. Politicians use positive analysis to perform their normative analysis. Analysis that is concerned with what ought to be based on facts and statements. An economy in which decision of individuals households and firms interacting in market allocate economic resources. Invisible hand if markets are left to their own devices and there is no interference resources will allocate as efficiently possible.
