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1、ThinkingLikeanEconomistEconomicstrainsyouto.6Usesabstractmodelstohelpexplainhowacomplex,realworldoperates.0Developstheories,collectsandanalyzesdatatoevaluatethetheories,EconomicModelsoEconomistsusemodelstosimplifyrealityinordertoimproveourunderstandingoftheworld.oTwoofthemostbasiceconomicmodelsafe:T
2、heCircularFlowDiagramTheProductionPossibilitiesFrontierOurFirstModel:TheCircular-FlowDiagramoThecircu/ar-Howdiagramisavisualmodeloftheeconomythatshowshowdollarsflowthroughmarketsamonghouseholdsandfirms.poeuegceneceswnersGoo0sASEnyoesfomsanOurSecondModel:TheProductionPossibilitiesFrontieroTheproducti
3、onpossib/itiesfrontierisagraphthatshowsthecombinationsofoutputthattheeconomycanpossiblyproducegiventheavailablefactorsDfproductionandtheavailableproductiontechnology.Figure2TheProductionPossibilitiesFrontierantityofmputersroduced3.0002.2002.000Productionpossibilities1.000frontier77Guantftyof03006007
4、001.000CarsProducedOurSecondModel:TheProductionPossibilitiesFrontieroConceptsillustratedby_heproductionpossilpontierEfficiencyTrade-offsOpportunitycostEconomicgrowthFigure3AShiftintheProductionPossibiltiesFrontieruantityofmputers06006501.000cars命8命MicroeconomicsandMacroeconomicsoMicroeconomicsfocuse
5、sontheindividualpartsoftheeconomy.HowhouseholdsandfirmsmakedecisionsandhowtheyinteractinSpecificimarketsoMacroeconomicslooksattheeconomyasawhole.Economy-widephenomenaincludinginflation,unemployment,andeconomicgrowthPositiveversusNormativeAnalysisoPositiyvestatementsarestatementsthatattempttodescribetheworldaS比is.CalleddescriptiveanalysisoNorn)gtiyestatemehts.arestatementsabouthowtheworldshouldbe.。Calledprescriptiveanalysis
