Handout%202 - Economics 3130 Mukul Majumdar Handout #2 1...

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Economics 3130 Mukul Majumdar Handout #2 1 Partial Equilibrium By a model we mean a simpli&ed representation of reality. The empha- a one-to-one scale would be. The same is true of an economic model. A model±s power stems from an elimination of irrelevant detail, which allows the economist to focus on the essential features of the economic reality he or she is attempting to understand.[Varian,pp.1-2] The success of a model rests on its explanatory or predictive power (or, both). Descriptive models / Normative Models micro models consumer. ..] macro models focus on aggregates Economics is the study of how people and society end up choosing. . to employ scarce productive resources that could have alternative uses - to produce various commodities and to distribute them for consumption, now or in the future, among various persons and groups in society.
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This note was uploaded on 12/23/2009 for the course ECON 3130 at Cornell University (Engineering School).

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Handout%202 - Economics 3130 Mukul Majumdar Handout #2 1...

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