3 1 economics 1 st term 2011

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3 1 economics 1 st term 2011

  1. 1. 01 ECONOMICS A 3-1 SUBJECT? project date 20/09/2007
  2. 2. 01 I want a full stomach! I want a fur coat! Let’s compromise… The bear ate the man…they both got what they wanted. What could possibly happen?
  3. 3. Don't ever start your day in neutral! Take the initiative Fight the issue not the person Take control of your day and life Be decisive BE STRONG & COURAGEOUS... Joshua 1:6-7,9 Source: JL Mason
  4. 4. 01 <ul><li>GOALS </li></ul><ul><li>Understand why economics is </li></ul><ul><ul><li>Science </li></ul></ul><ul><ul><li>Art </li></ul></ul><ul><ul><li>Social science </li></ul></ul><ul><li>Differentiate </li></ul><ul><li>Microeconomics vs. Macroeconomics </li></ul><ul><li>Positive vs. Normative Analysis </li></ul><ul><li>Theories vs. Models </li></ul>
  5. 5. ECONOMICS is like… Cork-can-bottle opener Nescafe 3-1 coffee 3-in-1 printer, fax and photocopying machine SCIENCE SOCIAL SCIENCE ARTS
  6. 6. <ul><li>Economics uses SCIENTIFIC APPROACH OR METHOD in studying economic events or phenomena </li></ul>SCIENCE “ What a science (economics) does or should do is simply allow the average man to command the heights of a genius.” (James Buchanan)
  7. 8. <ul><li>Uses scientific approach </li></ul><ul><li>Experiments in laboratories </li></ul><ul><li>Uses experimental data </li></ul><ul><li>Uses statistics </li></ul><ul><li>Uses scientific approach </li></ul><ul><li>No experiments in laboratories; society is the laboratory </li></ul><ul><li>uses real or actual data of people or non-experimental data </li></ul><ul><li>Uses statistics </li></ul>PHYSICAL SCIENCES ECONOMICS
  8. 9. ARTS
  9. 10. ART is the... ability process product
  10. 11. ECONOMICS AS AN ART? <ul><li>Art is a skill acquired by experience, discipline, study or observation </li></ul><ul><li>Skill in applying economic tools or principles in real life situation </li></ul>
  11. 12. <ul><li>The business world could use all the art, all of the out-of-the-box thinking , all the innovative problem solving that it can find. </li></ul><ul><li>Creativity (art) can be integrated into every aspect of business… </li></ul>
  12. 13. SOCIAL SCIENCE
  13. 14. ECONOMICS AS A SOCIAL SCIENCE? <ul><li>It is a social science because it studies society or people in the economy </li></ul><ul><li>It studies the economic behavior of man in the market </li></ul><ul><li>Needed to change/improve society </li></ul>
  14. 15. MIC - MAC MICROECONOMICS VS. MACROECONOMICS
  15. 16. MIcroeconomics MAcroeconomics Microscope Telescope
  16. 17. WHAT’S THE DIFFERENCE? MICROECONOMICS MACROECONOMICS I A
  17. 18. MAcroeconomics MIcroeconomics whole parts
  18. 19. M I croeconomics = I ndividual / Specific <ul><li>Two major fields/divisions </li></ul><ul><li>1. Microeconomics = Parts, Trees </li></ul><ul><li>About INDIVIDUAL economic units such as CONSUMER and FIRM, INDUSTRY, </li></ul><ul><li>How they make decisions and how they interact in specific markets </li></ul><ul><li>MARKET ECONOMICS </li></ul>
  19. 20. M A croeconomics = A ggregate, A ll , General <ul><li>2. Macroeconomics = Whole, Forest </li></ul><ul><li>Studies how the economy behaves as a whole </li></ul><ul><li>Country’s output, general price level, national income and employment and unemployment, balance of payments and exchange rates </li></ul><ul><li>NATIONAL ECONOMICS </li></ul>
  20. 21. Micro vs Macro <ul><li>An individual or a family decides to buy a laptop </li></ul><ul><li>A firm’s production of a good </li></ul><ul><li>The price of notebook, pen, etc </li></ul><ul><li>All consumers’ demands for all goods </li></ul><ul><li>Total production of goods of all firms </li></ul><ul><li>The general price of all goods and services </li></ul>
  21. 22. Categorize whether the statement is under microeconomics (A) or macroeconomics (B)
  22. 23. <ul><li>3 IN 1 Science, Social Science and Art </li></ul><ul><li>TWO MAJOR FIELDS </li></ul><ul><ul><li>Microeconomics </li></ul></ul><ul><ul><li>Macroeconomics </li></ul></ul><ul><li>TWO TYPES OF ANALYSES / STATEMENTS </li></ul><ul><ul><ul><ul><li>Positive </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Normative </li></ul></ul></ul></ul>ECONOMICS
  23. 24. RED APPLE OR GREEN APPLE POSITIVE ANALYSIS NORMATIVE ANALYSIS
  24. 25. POSITIVE ANALYSIS NORMATIVE ANALYSIS SCIENTIST POLITICIAN
  25. 26. ECONOMIST AS A SCIENTIST <ul><li>Uses POSITIVE ANALYSIS </li></ul><ul><li>Uses facts and determines cause-and-effect relationships </li></ul><ul><li>Develops and tests theory </li></ul><ul><li>Does not use personal value judgment </li></ul><ul><li>Can be proven/rejected </li></ul><ul><li>Answers the basic question – WHAT IS </li></ul>
  26. 27. ECONOMIST AS POLICYMAKER <ul><li>Uses NORMATIVE ANALYSIS </li></ul><ul><li>Incorporates value judgment about the economy </li></ul><ul><li>Recommends/prescribes policy actions to achieve desired economic change or goal </li></ul><ul><li>Makes claim about how the economy OUGHT TO BE </li></ul>
  27. 28. POSITIVE vs. NORMATIVE <ul><li>WHAT IS? </li></ul><ul><li>Describes using facts and numbers </li></ul><ul><li>Cause and effect relationship </li></ul><ul><li>Uses scientific analysis </li></ul><ul><li>WHAT OUGHT TO BE? </li></ul><ul><li>Prescribes or recommends policies </li></ul><ul><li>Incorporates value judgment </li></ul>Statement of facts Statement of values
  28. 29. POSITIVE vs. NORMATIVE Statement of facts Statement of values You are entitled to your own opinion but you are not entitled to your own facts!
  29. 30. POSITIVE vs. NORMATIVE <ul><li>WHAT IS? </li></ul><ul><li>The economy has grown by 4.7% in 2008. Last year’s growth was recorded at 7.3%. </li></ul><ul><li>WHAT OUGHT TO BE? </li></ul><ul><li>Economic growth should be continuing and consistent so that poverty will be eliminated! </li></ul>
  30. 31. POSITIVE vs. NORMATIVE <ul><li>WHAT IS? </li></ul><ul><li>The current bank lending interest rate is noted at 9.7% in 2006 from 10.2% last year. </li></ul><ul><li>WHAT OUGHT TO BE? </li></ul><ul><li>Interest rate ought to be low to stimulate business and investment in the country </li></ul>
  31. 32. Categorize whether the statement is a positive statement (A) or a normative statement (B)
  32. 33. MICRO ECONOMICS MACRO ECONOMICS 2 Branches/ Fields 2 Types of Analyses Positive “What is, was, will be” Normative “What ought to be?” SCIENCE SOCIAL SCIENCE ART “ Applied Economics” 3-1 Discipline Taxonomy of Economics
  33. 34. 1-2-3 HYPOTHESIS THEORY LAWS OR PRINCIPLES Statement that needs to be tested/proven As hypothesis is proven true, it evolves into a theory A well tested and accepted theory becomes a law or principle
  34. 35. THEORIES vs. MODEL <ul><li>STATEMENTS about economic behavior that enable the prediction of the probable effects of certain actions </li></ul><ul><li>FORMAL STATEMENT OF A THEORY usually in the form of </li></ul><ul><li>mathematical equation </li></ul><ul><li>diagram or graph </li></ul>
  35. 36. THEORIES vs. MODEL <ul><li>Law of Demand states that as price of the good increases, quantity demanded falls, ceteris paribus (all else equal) </li></ul><ul><li>Qd = 10 - 2P </li></ul>D P Qd
  36. 37. DIVERSE FIELDS OF ECONOMICS <ul><li>Urban and regional economics </li></ul><ul><li>Econometrics </li></ul><ul><li>Economic Development </li></ul><ul><li>Labor Economics </li></ul><ul><li>International Economics </li></ul><ul><li>Public Economics </li></ul><ul><li>Economic History </li></ul><ul><li>Many more </li></ul>
  37. 38. QUALITIES NEEDED TO STUDY ECONOMICS <ul><li>Analytical and logical and desiring to learn just like a philosopher </li></ul>
  38. 39. QUALITIES NEEDED TO STUDY ECONOMICS <ul><li>Can work with some numbers just like a mathematician </li></ul>
  39. 40. QUALITIES NEEDED TO STUDY ECONOMICS <ul><li>Interest in research and knowledgeable with past and current issues just like an historian </li></ul>
  40. 41. QUALITIES NEEDED TO STUDY ECONOMICS <ul><li>Considerate of the welfare of the people just like a statesman </li></ul>
  41. 42. Group exercise 3 ounce 5 ounce 8 ounce The largest glass is full. What can you do to get 4 ounces of liquid into each of the larger two glasses?
  42. 43. LET US APPLY WHAT WE HAVE LEARNED!
  43. 44. CHART OBJECT 02 project date 20/09/2007
  44. 45. <ul><li>Bullet Point </li></ul><ul><li>Bullet Point </li></ul><ul><ul><li>Sub Bullet </li></ul></ul>PICTURE OBJECT 03 project date 20/09/2007
  45. 46. <ul><li>Text and lines are like this </li></ul><ul><li>Hyperlinks like this </li></ul><ul><li>Visited hyperlinks like this </li></ul>Text box DEFAULT STYLES 04 project date 20/09/2007 Table
  46. 47. <ul><li>Bullet Point </li></ul><ul><li>Bullet Point </li></ul><ul><ul><li>Sub Bullet </li></ul></ul>BULLET OBJECT 05 project date 20/09/2007
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