01Thinking like an Economist - computers 3000 tons o±...

Info icon This preview shows pages 1–16. Sign up to view the full content.

View Full Document Right Arrow Icon
Thinking like an Economist Thinking like an Economist Economics as a (dismal)science The role of assumptions Modelling
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Economics as science ObservationsTheoriesObservatio nsTheories………
Image of page 2
Assumptions E.g. two countries, two goods (what? Am I an idiot or something?)
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Models E.g. A very detailed map and a map that gives you only the few main roads on the way
Image of page 4
Examples of Model Circular flow diagram (for Macroeconomic course)
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Examples of model Production Possibilities Frontier (PPF)
Image of page 6
E.g. PPF Two types of goods: wheat and computers Resource: 50,000 labor hours Technology: 1 computer– 100 labor hours 1 tone of wheat—10 labor hours
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Computer s (labor hrs used) wheat (labor hrs used) A 50,000 0 B 40,000 10,000 C 25,000 25,000 D 10,000 40,000 E 0 50,000 computer s Wheat (tons) A B C D E
Image of page 8
computer s Wheat (tons) A 500 0 B 400 1000 C 250 2500 D 100 4000 E 0 5000
Image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Efficiency and possibilities E.g Find the point that represents (100
Image of page 10
Image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
Image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 14
Image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 16
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: computers, 3000 tons o± wheat), label it F. • E.g. Find the point that represents (300 computers and 3500 tons o± wheat), label it G. • Would it be possible to attain the point? Is it efcient? PPF and opportunities cost • What is the opportunity cost of producing one ton of wheat? • What is the opportunity cost of producing one computer? computer s Wheat (tons) A 500 B 400 1000 C 250 2500 D 100 4000 E 5000 Which one is more costly? The shape of PPF • Straight line or bowed shape? What results in the shape? Bowed out shape of PPF or concavity of PPF Technological change and PPF Normative vs Positive • Normative statement says what ought to be. E.g The government should impose gasoline tax • Positive statement says what is. E.g. A rapid growth in money supply leads to an increase in infation...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern