Studied by 3 peoplerationality theory
everyone works in their own self interest (tends to benefit others anyway)
oppportunity loss
choosing one thing gets rid of your ability to do the other (you want this to be high as opposed to low)
absolute advantage
you’re flat out better at something
comparative advantage
you find what you’re best at, party does it with the least opportunity loss
Output
Maximize
Input
Minimize
Factors of production
Land, labor, capital: a country with more of these can operate more efficiently
Empirical economics
Provable by experience or math, the world as how it is not how it should be
Normative economics
Statements based on values and judgements, less scientific
Product Market
businesses sell goods and services, while households buy the goods and services
Factor Market
businesses buy the factors of production, land labor, and capital, while the people sell their labor to make income
Note
Flashcard