Chapter 1
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The Economics Perspective Why Study Economics Economic Methodology 1 C HAPTE R Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide Next Slide The Nature and Method of Economics End Show 1-1 Copyright McGraw-Hill/Irwin, 2005 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1-2 Next Slide Consider... The Economics Perspective • SCARCITY & CHOICE • RATIONAL BEHAVIOR • UTILITY • MARGINAL ANALYSIS Marginal Benefits & Marginal Costs Copyright McGraw-Hill/Irwin, 2005 WHY STUDY ECONOMICS The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms •Adam Smith •David Ricardo •John Stuart Mill •Karl Marx •John Maynard Keynes plus many modern contributors... Previous Slide Next Slide Economics for Citizenship Professional & Personal Applications End Show 1-3 Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1-4 Next Slide Scientific Method Hypothesis Testing Theory Law Principles Models Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Policy Economics Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide Theoretical Economics Theories Next Slide Facts End Show 1-5 Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Analytical Economics Terminology Generalizations Pitfalls to Sound Reasoning Key Terms Previous Slide Next Slide End Show 1-6 Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus Next Slide End Show 1-7 Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide Next Slide Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus Abstractions End Show 1-8 Copyright McGraw-Hill/Irwin, 2005 ECONOMIC METHODOLOGY The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1-9 Next Slide Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus Abstractions Graphical Expression Copyright McGraw-Hill/Irwin, 2005 ECONOMIC POLICY The Economics Perspective Why Study Economics Economic Methodology STATE THE GOAL Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 10 Next Slide POLICY OPTIONS IMPLEMENT & EVALUATE Copyright McGraw-Hill/Irwin, 2005 ECONOMIC GOALS The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 11 What are our goals and objectives? Next Slide Copyright McGraw-Hill/Irwin, 2005 ECONOMIC GOALS The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 12 Next Slide •Economic Growth •Full Employment T •Economic Efficiency R A •Price-Level Stability D •Economic Freedom E O •Equitable Distribution F F •Economic Security S •Balance of Trade Copyright McGraw-Hill/Irwin, 2005 The Economics Perspective MACROECONOMICS... Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 13 Next Slide Copyright McGraw-Hill/Irwin, 2005 The Economics Perspective Why Study Economics Economic Methodology MACROECONOMICS... MICROECONOMICS... Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 14 Next Slide Copyright McGraw-Hill/Irwin, 2005 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 15 Next Slide MACROECONOMICS... MICROECONOMICS... Positive Economics Absolute Facts Normative Economics What Ought to be Copyright McGraw-Hill/Irwin, 2005 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms Previous Slide End Show 1 - 16 Next Slide PITFALLS TO SOUND REASONING Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies Post Hoc Fallacy Correlation vs. Causation Copyright McGraw-Hill/Irwin, 2005 economics economic perspective utility marginal analysis scientific method theoretical economics principles generalizations other-things-equal assumption Copyright McGraw-Hill/Irwin, Inc. 2005 policy economics tradeoffs macroeconomics aggregate microeconomics positive economics normative economics fallacy of composition “after this, therefore because of this” fallacy BACK END CHAPTER 2 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Sound Reasoning Key Terms THE ECONOMIZING PROBLEM COMING SOON Previous Slide End Show 1 - 18 Next Slide Copyright McGraw-Hill/Irwin, 2005
