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1.Nature, Method.ppt
- 1. 1 The Nature and Method of Economics
- 2. 2 The Economics Perspective • Scarcity and Choice
- 3. 3 The Economics Perspective •Rational Behavior
- 4. 4 The Economics Perspective Marginal Analysis
- 5. 5 The Economics Perspective Marginal Benefits & Marginal Costs Marginal Analysis
- 6. 6 Economists of the past • John Maynard Keynes British economist, known for his revolutionary theories on the causes of prolonged unemployment.
- 7. 7 Economists of the past • 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 the past •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 the past •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 the past •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.
- 12. 12 Economic Methodology Scientific Method • Hypothesis Testing • Theory • Law or Principle • Model
- 14. 14 Analytical Economics • Terminology • Generalization • Ceteris paribus assumption • Abstraction • Graphical expression Economic Methodology
- 15. 15 STATING GOALS POLICY OPTIONS EVALUATION Economic Methodology Policy Economics
- 16. 16 What are our goals and objectives? Economic Goals
- 17. 17 Economic Goals • Economic Growth
- 20. 20 Economic Goals •Price level stability
- 22. 22 Economic Goals •Equitable distribution of income
- 23. 23 Economic Goals • Economic security
- 24. 24 Economic Goals •Balance of trade Country P R O W
- 25. 25 Economic Goals • Economic Growth • Full employment • Economic efficiency • Price level stability • Economic freedom • Equitable distribution • Economic security • Balance of trade
- 28. 28 Positive Economics • focuses on absolute facts • cause & effect relationship • concerned with ‘what is’
- 29. 29 Normative Economics • incorporates value judgment • recommends policy prescriptions • concerned with ‘what ought to be’
- 30. 30 •Biases •Loaded Terminology •Definitions •Fallacy of Composition •Causation Fallacies Pitfalls to Objective Thinking