Chapter_3Sept1

Chapter_3Sept1 - Chapter 3: Why we do what we do. September...

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Chapter 3: Why we do what we do. September 1, 2011
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What is a model? Simplified illustration of how systems operate in order to gain insight into how things work. Examples from political science Principal agent model Stages model of the policy making process Economic voter model
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Law of Supply and Demand Models how consumers and producers behave First assumption: as the price of a good or service falls, some consumers who would have bought something else will buy the good with the falling price and others will buy more of it. Second assumption: as the price of the good or services rises, producers will supply more it to the market.
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Ceteris Paribus Assumption All things other being equal The item of interest can change, but everything else remains constant. This is really difficult to achieve, even with high end statistics.
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We are utility maximizers. Utility equals well being.
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This note was uploaded on 11/16/2011 for the course POLI SCI 2070 taught by Professor Davis during the Fall '11 term at LSU.

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Chapter_3Sept1 - Chapter 3: Why we do what we do. September...

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