FS09EC2106_CH2 - ECON 2106 Professor Byung-Cheol Kim...

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ECON 2106 Professor Byung-Cheol Kim
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Reading “Incentive Pay” Incentive pay
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THE ECONOMIST AS A SCIENTIST The economic way of thinking . . . Involves thinking analytically and objectively. Makes use of the method. Uses to help explain how a complex, real world operates. Develops , collects and analyzes data to evaluate the theories.
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Economists make in order to make the world easier to understand. The art in scientific thinking is deciding which to make. Economists use different to answer different questions. The Role of Assumptions
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Economic Models The most basic economic models are: The Circular Flow Diagram The Production Possibilities Frontier Supply-Demand Model Any other models that you have heard of?
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Figure 1 The Circular Flow Spending Goods and services bought Revenue Goods sold Labor, land, and capital Income = Flow of inputs and outputs = Flow of dollars Factors of production Wages, rent, and profit FIRMS •Produce and sell goods and services
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This note was uploaded on 01/25/2012 for the course ECON 2106 taught by Professor Minjaesong during the Fall '06 term at Georgia Institute of Technology.

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FS09EC2106_CH2 - ECON 2106 Professor Byung-Cheol Kim...

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