Micro 2

2. Lecture 2
Macroeconomics

3. Opening
Prayer

4. Quizmaster
10 questions
3 answers
email to
mckytee@go.byuh.edu
1 Extra Credit Point

5. The Economic Way
of Thinking
Think Like
an Economist

6. Taylor McKendrick
TA
Econ Lab
Room 123
Tuesday
4:00 - 5:30
Wednesday
7:00 - 8:00
Thursday
11:00 - 12:00
4:00 - 5:30

7. Course
Textbook
Modern Principles of
Microeconomics
5th Edition
Cowan, Tabarrok.

8. You can count the
number of babies born
today
But you can't count
their ideas

9. Markets are where learning
is tested
Vote on value
Innovations are market-
successful inventions

11. Time Commitment
Class 4 Hours
Homework 8 Hours
Total 12 Hours

12. Every Trade
One Price
TwoValues
Two Winners

13. Think
like an
Economist

14. Words
Numbers
Illustrations

15. Economist’s
Dictionary

16. Yabut
Yes, but
Weight Costs and
Benefits

17. What are the two
questions
economists always
ask?

18. Compared to what?
Then what happens?

19. What would you
have to be paid
to never use the
Internet again?
Then you must
be a millionaire

20. Only possible
because billions
of people have
learned to
cooperate with
each other
To serve one
another

21. The most
creative-destructive
device ever
invented

23. What does it cost to ship an iPhone from China to the U.S.?
54¢
450,000 iPhones cost about $242,000 to charter
Fuel accounting for more than half the expense. 44,700 gallons

24. What is worth the most?

25. Optimize
Tradeoffs

26. 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.

27. Economic Models
Simplified Version of
Reality
Value in Prediction

28. Incentives Matter
Change Incentives
Change Behavior

29. Incentives are
more important
than goals

30. Consequences
matter more than
intentions

31. Unintended
Consequences

32. Macro Micro

33. U.S. Farmers
1800 - 90 percent

34. U.S. Farmers
1900 - 45 percent
Gasoline engines
replaced horses

35. U.S. Farmers
2012 - 2 percent

36. What happened to those 88 people?

38. Get wealthy
by making
others happy

39. Every person
has the power
to create
wealth

40. Because every
person has the
power to make
someone happy

43. Opportunity Costs
You buy things with
money and time

44. What does it cost
to go to a movie?

45. Comparative
Advantage

46. 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

47. Adam Eve
Total
Hours
Make a
Hook
Cost 3/4
fish
Cost 2
fish
Catch
a Fish
Cost 4/3
hooks
Cost 1/2
hooks
Total
Hours
Do-It-Yourself Costs

48. Adam Eve
Total
Hours
Make a
Hook
2 hooks
6 hours
6
Catch
a Fish
2 fish
2 hours
2
Total
Hours
6 2 8
With Trade
2 Hooks and 2 Fish
8 Hours - 4 Hours Per Fish