ECN 104 Lecture Notes - Lecture 2: Opportunity Cost, Human Capital
23 Nov 2017
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Document Summary
A model is a simplified representation of a real situation that is used to better understand real-life situations. Allow us to hold other things constant - all other relevant factors remain unchanged-when studying the object of interest. : how does immigration affect international trade in goods and services in. Resources are scarce, so economies face trade-offs (principle #1) To think about these trade-offs economists use a simple model known as the production. Simplification: imagine canada is a one-company economy (bombardier), which can produce two goods (trains and jets) We can then analyze: feasibility, efficiency (in production), opportunity cost, economic growth. Positive economics: is the branch of economic analysis that describes the way the economy actually works (what is) Normative economics makes prescriptions about the way the economy should work (what should be). Economists can determine correct answers for positive questions, but typically not for normative questions, which involve value judgements.
