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Gale Pooley
Gale Pooley

Macro 2

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Lecture 2 - Introduction Macroeconomics
Opening Prayer
Quiz 1.When did the world start escaping poverty? 2.What is the foundational scripture for this class? 1820 D&C 104: 17
Quizmaster 1. Ten Questions 2. Three answers for each question 3. Email to Connor at by 3:00pm cjh425@go.byuh.edu 4. One Extra Point on Exam
Economics The study of how human beings solve each another’s problems
Words Numbers Illustrations
Economist’s Dictionary
Yabut Yes, but Weight Costs and Bene fi ts
Science Hard Soft
Most people Most of the time Economics is a Soft Science
What are the two questions economists always ask?
Compared to what? Then what happens?
Price is more valuable information than quantity
Opportunity Costs You buy things with money and time
What does it cost to go to a movie?
Comparative Advantage
Adam Eve Total Hours Make a Hook 3 2 5 Catch a Fish 4 1 5 Total Hours 7 3 10 No Trade 2 Hooks and 2 Fish 10 Hours - 5 Hours per Fish
Adam Eve Total Hours Make a Hook Cost 3/4 fi sh Cost 2 fi sh Catch a Fish Cost 4/3 hooks Cost 1/2 hooks Total Hours Do-It-Yourself Costs
Adam Eve Total Hours Make a Hook 2 hooks 6 hours 6 Catch a Fish 2 fi sh 2 hours 2 Total Hours 6 2 8 With Trade 2 Hooks and 2 Fish 8 Hours - 4 Hours Per Fish
Where is the iPhone made?
ARM Holdings Wolfson Marvel Skyworks CSR Linear Technologies NXP National Semiconductor Sharp Samsung Toshiba Infineon Broadcom Numonyx Micron Dialog Semiconductor Texas Instruments STMicroelectronics Silicon Storage RF Microdevices Cirrus Logic U.S. U.K. Germany Korea Japan Taiwan China
Made on Earth
Design Manufacturing Parts Assembly Packaging Shipping Marketing
What would you have to be paid to never use the Internet again? Then you must be a millionaire
Only possible because billions of people have learned to cooperate with each other To serve one another
The most creative-destructive device ever invented
What does it cost to ship an iPhone from China to the U.S.? 450,000 iPhones $242,000 to charter 54¢ Fuel accounting for more than half the expense. 44,700 gallons
What is worth the most?
Optimize Tradeoffs
Tradeoffs Mileage Safety A 2001 National Academy of Sciences study estimated that the traffic death toll attributable to past downsizing was approximately 2,000 lives per year.
Economic Models Simplified Version of Reality Value in Prediction
Incentives Matter Change Incentives Change Behavior
Incentives are more important than goals
Consequences matter more than intentions
Unintended Consequences
Macro Micro
U.S. Farmers 1800 - 90 percent
U.S. Farmers 1900 - 45 percent Gasoline engines replaced horses
U.S. Farmers 2012 - 2 percent
What happened to those 88 people?
What is Wealth? What People Want
Get wealthy by making others happy
Every person has the power to create wealth
Because every person has the power to make someone happy

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Macro 2.pdf