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Economics for Engineers - Part I

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Introduction to Business Economics for Engineers
Thinking like an Economist!
What are the basic tools for economic thinking?
Can you really understand what economics is all about?

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Economics for Engineers - Part I

  1. 1. Economics for Engineers Part 1 Economics for Engineers – Part I Mohammad Tawfik
  2. 2. Thinking like an Economist Based on: Thinking like an Economist: A Guide to Rational Decision Making By: Randall Bartlett, Ph.D. Economics for Engineers – Part I Mohammad Tawfik
  3. 3. 6 Principles of the Economist's Toolkit Economics for Engineers – Part I Mohammad Tawfik
  4. 4. Principle Number 1: People respond to incentives. Economics for Engineers – Part I Mohammad Tawfik
  5. 5. We need to anticipate the incentives we are creating Economics introducing policies! when for Engineers – Part I Mohammad Tawfik
  6. 6. Principle number 2: There is no such thing as a free lunch Economics for Engineers – Part I Mohammad Tawfik
  7. 7. Opportunity Cost Economics for Engineers – Part I Mohammad Tawfik
  8. 8. Resources are scarce! Time, money, food Economics for Engineers – Part I Mohammad Tawfik
  9. 9. Principle number 3: No thing is just one thing; There are always at least 2 sides to every interaction. Economics for Engineers – Part I Mohammad Tawfik
  10. 10. Every buy is a sell Economics for Engineers – Part I Mohammad Tawfik
  11. 11. If we do not spend money, no one will earn money! Economics for Engineers – Part I Mohammad Tawfik
  12. 12. Principle number 4: The law of unanticipated influences Economics for Engineers – Part I Mohammad Tawfik
  13. 13. Butterfly effect! Economics for Engineers – Part I Mohammad Tawfik
  14. 14. Medical cost will increase when disturbance happens in Iran! Economics for Engineers – Part I Mohammad Tawfik
  15. 15. Bombing in Iraq results in a drop of tourism in Egypt! Economics for Engineers – Part I Mohammad Tawfik
  16. 16. Principle Number 4: The Law of unanticipated consequences Economics for Engineers – Part I Mohammad Tawfik
  17. 17. Accidents because of red-light cameras! Economics for Engineers – Part I Mohammad Tawfik
  18. 18. Economics for Engineers – Part I Mohammad Tawfik
  19. 19. Principle number 6: No one is, and no one ever can be, in complete control. Economics for Engineers – Part I Mohammad Tawfik
  20. 20. Principle number 6: No one is, and no one ever can be, in complete control. Economics for Engineers – Part I Mohammad Tawfik
  21. 21. Economics for Engineers – Part I Mohammad Tawfik
  22. 22. 3 Core Concepts Economics for Engineers – Part I Mohammad Tawfik
  23. 23. I - Rationality Economics for Engineers – Part I Mohammad Tawfik
  24. 24. I - Rationality Economics for Engineers – Part I Mohammad Tawfik
  25. 25. Economics for Engineers – Part I Mohammad Tawfik
  26. 26. Personal preferences. How we decide not to what we decide! Economics for Engineers – Part I Mohammad Tawfik
  27. 27. Your preferences appear in your choices! Economics for Engineers – Part I Mohammad Tawfik
  28. 28. II – Marginal Analysis Economics for Engineers – Part I Mohammad Tawfik
  29. 29. Economics for Engineers – Part I Mohammad Tawfik
  30. 30. If we woke up tomorrow and gas prices had doubled, how would that affect automobile usage? Economics for Engineers – Part I Mohammad Tawfik
  31. 31. Economics for Engineers – Part I Mohammad Tawfik
  32. 32. Increasing spending in crime prevention Economics for Engineers – Part I Mohammad Tawfik
  33. 33. Water-Diamond Paradigm Value in use vs. Value in Exchange Economics for Engineers – Part I Mohammad Tawfik
  34. 34. III - Optimization Economics for Engineers – Part I Mohammad Tawfik
  35. 35. Equi-marginal Analysis Economics for Engineers – Part I Mohammad Tawfik
  36. 36. Imagine yourself on a new TV reality show. Economics for Engineers – Part I Mohammad Tawfik
  37. 37. The Price of Safety! Economics for Engineers – Part I Mohammad Tawfik
  38. 38. How to achieve Economic Efficiency? Economics for Engineers – Part I Mohammad Tawfik
  39. 39. Economists define efficiency as people being made better off. Economics for Engineers – Part I Mohammad Tawfik
  40. 40. They figured they could not find a strong, objective measure of social welfare, so they settled for a very weak one instead Economics for Engineers – Part I Mohammad Tawfik
  41. 41. Pareto Optimum Economics for Engineers – Part I Mohammad Tawfik
  42. 42. If we take a number of people, and something makes any one of them better off by their own judgment without making anyone else worse off, that is an unambiguous social improvement. Economics for Engineers – Part I Mohammad Tawfik
  43. 43. Incentives and Tragedy of the Commons Economics for Engineers – Part I Mohammad Tawfik
  44. 44. Tradable Quotas Economics for Engineers – Part I Mohammad Tawfik
  45. 45. Future Values – Discount Rate Economics for Engineers – Part I Mohammad Tawfik
  46. 46. Behavioral Economics Economics for Engineers – Part I Mohammad Tawfik
  47. 47. The Ultimatum Game Economics for Engineers – Part I Mohammad Tawfik
  48. 48. Anchor Points Economics for Engineers – Part I Mohammad Tawfik
  49. 49. Endowment Effect Economics for Engineers – Part I Mohammad Tawfik
  50. 50. Status Quo Effect Economics for Engineers – Part I Mohammad Tawfik

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