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Check In Question: What do you think Economics is? How would you define it?

Check In Question: What do you think Economics is? How would you define it? (If you’re not sure, list any words that come to mind when you hear “economics.”). Reminders:. Core 1 due date moved again … FRIDAY, APRIL 25 th !!! Test on TUESDAY, APRIL 22 nd !!!. THINK – PAIR - SHARE.

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Check In Question: What do you think Economics is? How would you define it?

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  1. Check In Question: What do you think Economics is? How would you define it? (If you’re not sure, list any words that come to mind when you hear “economics.”)

  2. Reminders: • Core 1 due date moved again…FRIDAY, APRIL 25th!!! • Test on TUESDAY, APRIL 22nd!!!

  3. THINK – PAIR - SHARE Respond to each question. Provide a thorough explanation for each decision. • If you could choose between two nearly identical products—one that is free and one that you have to pay for—which would you choose? Why? • If you were opening a new business, would you select a location closer to or farther away from a business that sold a similar or even identical product? Why? • If you could make a small change in your daily routine that would save you time and money, would you make the change? Why or why not?

  4. Intro to Economics You’re already thinking like an economist and you didn’t even know it! Objective: Economics, 7 Principles, Enigmas

  5. Check In Question: What do you think Economics is? How would you define it? (If you’re not sure, list any words that come to mind when you hear “economics.”)

  6. ECONOMICS • Depends on the economist and how they are viewing a particular situation.

  7. ECONOMICS • Analyzing how people use their scarce resources to satisfy their unlimited wants • Studying how people make choices (science of decision making) • Applying positive economics (how the economy actually works) and normative economics (how the economy ought to work) • Explaining everyday mysteries and enigmas

  8. “By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. ...But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt ... Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. ... Under necessaries, therefore, I comprehend, not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.” – Adam Smith, Wealth of Nations

  9. ECONOMICS • Analyzing how people use their scarce resources to satisfy their unlimited wants • Studying how people make choices (science of decision making) • Applying positive economics (how the economy actually works) and normative economics (how the economy ought to work) • Explaining everyday mysteries and enigmas

  10. The Tools of the Trade • Scientific Method, of course! • Ask question • Research • Hypothesis • Conduct study and collect data • Analyze data • Evaluate Hypothesis

  11. Thinking Like an Economist • 7 Principles of Economics • Explains trends on both large and small scale • Macro / Micro • For each of the following read the definition and consider a real world situation that you can explain to the class.

  12. 1 Scarcity Forces Tradeoffs • Scarcity: condition that results because people have limited resources but unlimited wants • Tradeoff: exchange one benefit or advantage for another that is thought to be better • Limited resources force people to make choices and face tradeoffs when they choose. • No-free-lunch-principle

  13. 2 Cost vs. Benefits • People choose something when the benefits of doing so are greater than the costs. • Benefits: gain something in terms of money, time, experience, etc. • Cost-benefit analysis • Formally list costs and benefits

  14. Sleeping One Hour Later…

  15. 3Thinking at the margin • Most of the decisions made each day involve choices about a little more or a little less of something. • Marginal Cost: What you give up to add one more unit to an activity. • Marginal Benefit: What you gain by adding one more unit.

  16. 4 Incentives matter • Motivates a person to take a particular action. • People respond to incentives in generally predictable ways.

  17. 5 trade makes people better off • By focusing on what we do well and then trading with others, we will end up with more and better choices than by trying to do everything for ourselves.

  18. 6 markets coordinate trade • Markets usually do better than anyone or anything else at coordinating exchanges between buyers and sellers. • Market: any arrangement that brings buyers and sellers together to do business with one another. • Invisible hand: individual’s pursuit of self-interest can promote the well-being of society as a whole.

  19. 7 Future consequences count • Decisions made today have future (and often unintended) consequences.

  20. Economic Enigmas • Enigma: A puzzle that seems to defy common sense • Economic analysis can explain these crazy things… • Why does movie theatre popcorn cost more than grocery store popcorn??? • Why do store sell things for $7.99 and not $8???

  21. Enigmas • Complete the worksheet with accompanying visuals in small groups. • TALK and HELP each other

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