ECON 102 Chapter Notes - Chapter 2: Boeing 787 Dreamliner, Wright Brothers, Involuntary Unemployment
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ECON 102 Full Course Notes
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Chapter 2 - economic models: trade-offs and trade. The wright brothers invented a wind tunnel to test airplanes before building the full airplanes. This invention was very important because it served as a medium to test and represent the real thing. The boeing dreamliner was able to improve itself by undergoing tests with models to create the best plane possible. Model - any simplified representation of reality used to better understand real-life situations: economists find or create real but simplified economies or they stimulate the working of economies on computers. Tax models - assess how the proposed tax law would affect different types of people: models help economists focus on only one change at a time while holding everything else constant. Production possibly frontier - a simplified model which illustrates trade-offs facing an economy for only two goods (you can see the results graphically)
