Lecture Macroeconomics - Chapter 1: The nature and method of economics

Chapter 1 - The nature and method of economics. In this chapter you will learn: The definition of economics, about the economic way of thinking, how economists construct theories, the distinction between microeconomics and macroeconomics, the pitfalls to objective thinking.

The Nature and Method of Economics Chapter SLIDES PREPARED BY JUDITH SKUCE, GEORGIAN COLLEGE © 2002 McGraw-Hill Ryerson Ltd Chapter 1 In this chapter you will learn The definition of economics About the economic way of thinking How economists construct theories The distinction between microeconomics and macroeconomics The pitfalls to objective thinking © 2002 McGraw-Hill Ryerson Ltd Chapter Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter Ten Key Concepts The Individual Facing Tradeoffs Opportunity Costs Choosing a Little More or Less The Influence of Incentives © 2002 McGraw-Hill Ryerson Ltd Chapter Ten Key Concepts Interaction Among Individuals Specialization & Trade The Effectiveness of Markets The Role of Governments © 2002 McGraw-Hill Ryerson Ltd Chapter Ten Key Concepts The Economy as a Whole & the Standard of Living 10 Production & the Standard of Living Money & Inflation Inflation-Unemployment Tradeoff © 2002 McGraw-Hill Ryerson Ltd Chapter Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter The Economic Perspective Scarcity & Choice Rational Behaviour Marginal Analysis: Benefits & Costs © 2002 McGraw-Hill Ryerson Ltd Chapter Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter Economic Methodology The scientific method: observe the world © 2002 McGraw-Hill Ryerson Ltd Chapter 10 MACROECONOMICS © 2002 McGraw-Hill Ryerson Ltd Chapter 25 MICROECONOMICS © 2002 McGraw-Hill Ryerson Ltd Chapter 26 Positive & Normative Economics POSITIVE STATEMENTS.… based upon facts — without value judgments NORMATIVE STATEMENTS… based upon subjective beliefs — “what ought to be” © 2002 McGraw-Hill Ryerson Ltd Chapter 27 Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter 28 Pitfalls to Objective Thinking © 2002 McGraw-Hill Ryerson Ltd Chapter 29 Pitfalls to Objective Thinking Biases © 2002 McGraw-Hill Ryerson Ltd Chapter 30 Pitfalls to Objective Thinking Biases Loaded Terminology © 2002 McGraw-Hill Ryerson Ltd Chapter 31 Pitfalls to Objective Thinking Biases Loaded Terminology Definitions © 2002 McGraw-Hill Ryerson Ltd Chapter 32 Pitfalls to Objective Thinking Biases Loaded Terminology Definitions Fallacy of Composition © 2002 McGraw-Hill Ryerson Ltd Chapter 33 Pitfalls to Objective Thinking Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies ?? – Post Hoc Fallacy © 2002 McGraw-Hill Ryerson Ltd Chapter 34 Pitfalls to Objective Thinking Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies – Post Hoc Fallacy – Correlation vs Causation © 2002 McGraw-Hill Ryerson Ltd Chapter 35 Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter 36 A Look Ahead Chapter 2: a model of the production choices facing an economy Chapter 3: laws of demand & supply Chapter 4: how the market system works Chapter 5: the international sector © 2002 McGraw-Hill Ryerson Ltd Chapter 37 Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics Pitfalls to Objective Thinking A Look Ahead © 2002 McGraw-Hill Ryerson Ltd Chapter 38 CHAPTER THE ECONOMIC PROBLEM COMING SOON © 2002 McGraw-Hill Ryerson Ltd Chapter 39 ...In this chapter you will learn The definition of economics About the economic way of thinking How economists construct theories The distinction between microeconomics and macroeconomics The pitfalls... Trade The Effectiveness of Markets The Role of Governments © 2002 McGraw-Hill Ryerson Ltd Chapter Ten Key Concepts The Economy as a Whole & the Standard of Living 10 Production & the Standard of. .. Inflation-Unemployment Tradeoff © 2002 McGraw-Hill Ryerson Ltd Chapter Chapter Topics Ten Key Concepts to Retain for a Lifetime The Economic Perspective Economic Methodology Macroeconomics & Microeconomics