The economist has two roles

The economist has two roles - The economist has two roles...

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The economist has two roles 1) The economist can be a scientist Thomas Carlyle dubbed economics as the dismal science Economists use the scientific method to explain the world around us 2) The economist can be a policy advisor To act in these roles, the economist has a tool kit Assumptions- we use assumptions Models- Used to simplify things Circular Flow Diagram- -visual representation of the economy. Shows how dollars flow through markets among household and firms Includes two types of actors: Households Firms Includes two markets: The market for goods and services The market for factors of production Our second Model: Production Possibilities Frontier (PPF) Same as (PPC) Example: Two Goods: Computers and wheat One Resource: labor (measured in hours) Economy has 50,000 labor hours per month available for production Employment of labor hours Production Computers Wheat Computers Wheat A 50,000 0 500 0 B 40,000 10,000 400 1,000 C 25,000 25,000 250 2,500 D 10,000 40,000 100 4,000 E 0 50,000 0 5,000
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The economist has two roles - The economist has two roles...

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