Transcript Economics
Welcome to Economics Introduction, National Accounting, Macroeconomics, International Relations Peter Schmidt Business Environment Introductions . . . Economics Lecturer Students Who am I Peter Schmidt Economics & Statistics ZEW Zentrum für Europäische Wirtschaftsforschung Mannheim market . research . culture markt . forschung . kultur You are highly motivated students ... have to carry your individual workload: “Module Exercise” (Homework) reviewing and preparation online participation (Aulis) enjoy 7 weeks of Macro-Economics (Schmidt) 7 weeks of Micro-Economics (Preuß) 1 week of repetition will form teams for the Macro-Unit are going to study the “10 principles of Economics” by Greg Mankiw We ... meet in the wwweb at: schmidt-bremen.de co-operate online in AULIS: (10) Principles of Economics by Gregory Mankiw Copyright © 2001 by Harcourt, Inc. Every field of study has its own terminology Economics Supply Opportunity cost Comparative advantage Elasticity Consumer Surplus Demand Deadweight loss Economics trains you to. . . . Think in terms of alternatives. Evaluate the cost of individual and social choices. Examine and understand how certain events and issues are related. The Economist as a Scientist The economic way of thinking . . . Involves thinking analytically and objectively. Makes use of the scientific method. The Scientific Method Uses abstract models to help explain how a complex, real world operates. Develops theories, collects, and analyzes data to prove (or dismiss) the theories. Observation, Theory and More Observation! Ten Principles of Economics Chapter 1 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department, Harcourt College Publishers, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. A household and an economy face many decisions: Who will work? What goods and how many of them should be produced? What resources should be used in production? At what price should the goods be sold? Society and Scarce Resources: The management of society’s resources is important because resources are scarce. Scarcity . . . . . . means that society has limited resources and therefore cannot produce all the goods and services people wish to have. Economics Economics is the study of how society manages its scarce resources. Economists study. . . How people make decisions. How people interact with each other. The forces and trends that affect the economy as a whole. Ten Principles of Economics I How People Make Decisions 1. People face tradeoffs. 2. The cost of something is what you give up to get it. 3. Rational people think at the margin. 4. People respond to incentives. Ten Principles of Economics II How People Interact 5. Trade can make everyone better off. 6. Markets are usually a good way to organize economic activity. 7. Governments can sometimes improve economic outcomes. Ten Principles of Economics III How the Economy as a Whole Works 8. The standard of living depends on a country’s production. 9. Prices rise when the government prints too much money. 10. Society faces a short-run tradeoff between inflation and unemployment.