ECON 120W Lecture Notes - Lecture 2: Perfect Competition, Opportunity Cost
1 Oct 2017
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Document Summary
Statistics canada defines a low-income cut-off (lico: explicitly not a property line. In practice it"s used as one in canada. Statistics: normativity question: how do we define, measure: how well can we measure with accuracy. Economics differs from science since it answers the normative answer (a question that could not have a right answer), rather than a positive answer (a question that potentially has a right answer). Therefore, there is actually no good or bad in economics. Are simplification (only focus on core elements of a problem: markets assumed to be perfectly competitive, ppf (production possibility frontier): economy simplified to 2 goods. Graph only showing possible combination of output. Simplification to 2 outputs, one input (often) Highlights 2 main concepts: trade-offs, opportunity cost, efficiency. Any point under the line is feasible (area) /the points on the line is efficient (however, efficient doesn"t mean good: there will be a lack of another product if only product the certain one.
