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1.Nature, Method.ppt
- 1. 1 The Nature and Methodof Economics
- 2. 2 The Economics Perspective •Scarcity and Choice
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- 5. 5 The Economics Perspective MarginalBenefits & Marginal Costs Marginal Analysis
- 6. 6 Economists of thepast • John Maynard Keynes British economist, known for his revolutionary theories on the causes of prolonged unemployment.
- 7. 7 Economists of thepast • Adam Smith Introduced an economic system based on individual self-interest that would be led, as if by an “invisible hand,” to achieve the greatest good for all, and posited the division of labor as the chief factor in economic growth. …it stands as the beginning of classical economics
- 8. 8 Economists of thepast •David Ricardo He was a major figure in the development of classical economics and is credited as the first person to systematize economics.
- 9. 9 Economists of thepast •John Stuart Mill He is the leading expositor of utilitarianism …insistent that “utility” include the pleasures of the imagination and the gratification of the higher emotions
- 10. 10 Economists of thepast •Karl Marx He published (with Friedrich Engels) Manifest der Kommunistischen Partei (1848), commonly known as The Communist Manifesto, the most celebrated pamphlet in the history of the socialist movement.
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- 12. 12 Economic Methodology Scientific Method •Hypothesis Testing • Theory • Law or Principle • Model
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- 14. 14 Analytical Economics • Terminology •Generalization • Ceteris paribus assumption • Abstraction • Graphical expression Economic Methodology
- 15. 15 STATING GOALS POLICY OPTIONS EVALUATION EconomicMethodology Policy Economics
- 16. 16 What are our goalsand objectives? Economic Goals
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- 20. 20 Economic Goals •Price levelstability
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- 23. 23 Economic Goals • Economicsecurity
- 24. 24 Economic Goals •Balance oftrade Country P R O W
- 25. 25 Economic Goals • EconomicGrowth • Full employment • Economic efficiency • Price level stability • Economic freedom • Equitable distribution • Economic security • Balance of trade
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- 28. 28 Positive Economics • focuseson absolute facts • cause & effect relationship • concerned with ‘what is’
- 29. 29 Normative Economics • incorporatesvalue judgment • recommends policy prescriptions • concerned with ‘what ought to be’
- 30. 30 •Biases •Loaded Terminology •Definitions •Fallacy ofComposition •Causation Fallacies Pitfalls to Objective Thinking