EC120 Chapter Notes - Chapter 2: Scientific Method, Normative Economics, Environment And Climate Change Canada
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EC120 Full Course Notes
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Document Summary
Economists try to address their subject with a scientist"s objective (i. e. ) when they are trying to explain the world. The role of assumption: assumptions can simplify the complex world and make it easier to understand, scientific thinking = deciding which assumptions to make. Economic models: often composed of diagrams and equations, may omit many details to allow users to see what is truly important, all models are built with assumptions. Produces and sells g/s: hires and uses fop. Households: buys and consumes g/s, own and sells fop. A graph that shows a combination of output that the economy can possibly produce given the available fop and the available production technologies illustrates the concepts of trade-off and opp. costs, the lvl of efficiency, unemployment and economic growth. F: utilizes all resources available, points on the curve (a, b, e, f) = efficient (*) fop and technology are constants, opp.
