ECON 200 Lecture Notes - Lecture 1: Muhammad Yunus, Positive Statement, Normative Economics
13 Dec 2018
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Basic insights of economics: economics: the study of how people manage resources, decisions about how to allocate resources made by: individuals, groups of people in families, firms, governments, and other organizations, resources: not just physical things (cash/gold mines) In answering questions about trade-offs, economists commonly make two assumptions: 1) people respond to incentives. Intervention: government economic policies intentionally or unintentionally interfere with people"s ability to take advantage of profit making opportunities: goals other than profit: individuals and governments have goals other than profit: creating great art or promoting social justice, ex. ) An economist"s problem solving toolbox: economic analysis requires us to combine theory with observations and to subject both to scrutiny before drawing conclusions, distinguish between the way things are the way we think they should be. If both tend to occur at the same time or move in the same direction, we say they are positively correlated.
