Microeconomic PPF notes

Microeconomic PPF notes - Lecture21/21 21/01/200907:07:00

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Lecture 2 1/21 21/01/2009 07:07:00 3 fundamental questions: what, when, for who Microeconomics- Production- production output in individual industries Prices- price of individual goods and services Income- distribution of income and wealth Employment by individual businesses and industries Macroeconomics- Production- national production/output Prices- Aggregate price level Income- national income Employment- employment and unemployment in the economy John Maynard Keynes- separated macro from micro On Modeling and Constructing Theories Simplistic model construction o Ockham’s razor- Ockham criticized catholic church for being too  complicated o Models are simplistic and must be tested to be supported or refuted Evaluation of Models o Economics is a social science o Goal is to model the issue so we can get good information Two Pitfalls to avoid o The “fallacy of composition”- falling into the trap of assuming what is 
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Microeconomic PPF notes - Lecture21/21 21/01/200907:07:00

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