Thinking Like An Economist - Seven Secrets, One Big Idea
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Thinking Like An Economist - Seven Secrets, One Big Idea

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This slide deck provides an overview of seven secrets and one big idea that will help students think like economists.

This slide deck provides an overview of seven secrets and one big idea that will help students think like economists.

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  • Coming to lecture is a little like going to a football game. It is so much better to watch football with 110,000 people. A lecture hall is that way too! Things are more fun and interesting when everyone is participating!
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Thinking Like An Economist - Seven Secrets, One Big Idea Thinking Like An Economist - Seven Secrets, One Big Idea Presentation Transcript

  • INCENTIVESThe Big Idea andthe Seven Secretsfor Thinking Like anEconomist
  • INCENTIVESThe Big Idea •  Positive and negative incentives: –  grades •  Direct and indirect incentives: – Unintended consequences (Born on the First of July) •  Incentives and innovation •  Incentives are everywhere
  • The Seven Secrets:  Life is About Trade-Offs•  Examples of trade-offs: – College versus working, or a little of both – Cleaner environment or more production
  • The Seven Secrets:  Opportunity Cost•  What is Opportunity Cost?
  • The Seven Secrets:  Marginal Thinking•  What is marginal thinking?
  • The Seven Secrets:  Trade Creates Value•  Trade and Comparative Advantage
  • The Seven Secrets:  Markets Generally Work Well…..•  The market economy: – eBay, craigslist, stock market, supermarkets – The role of prices•  Adam Smith, the Father of Economic Thought –  It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. –  Wealth of Nations, 1776
  • The Seven Secrets:  …But Markets Sometimes Need a Hand•  Market failure – Poorly defined property rights – Externalities – Public goods – Market power
  • The Seven Secrets:  Our Decisions Have ConsequencesNow and in the Future•  Consumption and capital goods.•  The business cycle
  • The Seven Secrets:  There are No Free Lunches•  “Free” is a four-letter word! – Who is paying?