Chapter 1 - Chapter 1: An Introduction Micro focuses on the...

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Chapter 1: An Introduction - Micro focuses on the behavior of individuals as fundamental decision makers in society. - Micro is also referred to as “ Price Theory”—Macro is the “ income theory “ The nature and role theory: - a theory shows facts are related to one another - theory is based on certain assumptions - theory can be used to predict as well as explain real world outcomes - “good theory”-- theory that successfully explains and predicts the phenomena that it is intended to explain and predict. The Mapmaker: - Think of a theory as a map, if you want to go from one state to another you only mp the highways, stops etc. not the cul de sacs, etc. - Now moving inside the city you change the scale and now focus on local roads etc. - But no map can explain every road and feature. The calorie Theory - Mathematical explanation of ceteris paribus Positive Versus Normative Analysis: Positive: assessment of expected objective outcomes. Draws on accepted rules of logic and evidence scientific, which is what
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Chapter 1 - Chapter 1: An Introduction Micro focuses on the...

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