Introduction to Economics 1

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Introduction to Economics 1

• Class 1

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Todays Agenda

• Introduce ourselves
• Introduce the study of economics
• Go over syllabus, course schedule
• Answer registration questions

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Many people talk about economics and the
importance of economics without understanding
economics.

• What is Economics??
• Social science
• Studies people, societies
• The study of the choices that people make
• Fancy language studies how people choose to use
  their limited resources to produce, exchange and
  consume goods and services.

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Economics builds a language and methodology in
order to study peoples choices

• Themes of economics
• Why do people have to make choices?
• Scarcity, opportunity cost
• How do people make choices?
• Preferences, marginalism, incentives
• What happens when lots of people make choices at
  the same time?
• Markets, efficiency, specialization

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Once we learn the language of economics, we can
apply it to many types of choices

• How cool is economics?
• Traditional markets oil, stocks, clothes, food
• Elections
• Dating
• College admissions
• War
• Crime

Economics helps us understand many aspects of
human interactions
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Economics is typically divided into two main
branches

• Microeconomics and Macroeconomics
• Both study choices
• Microeconomics studies the choices of individuals
  and firms in a market setting
• Macroeconomics examines the economy as a whole,
  in the aggregate

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Economists often disagree, both about what is and
about what should be

• Positive and Normative Economics
• Positive economics is the study of what is in the
  economy.
• What if questions
• What would happen if we raise the price of a
  diamond solitaire necklace?
• Normative economics is the study of what ought to
  be in the economy
• Should we questions
• Should we give all summer economics instructors a
  diamond solitaire necklace?

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This class will introduce the terminology and
concepts used in economics

• Economics 1
• Part language course, part concepts course
• There will be some memorization involved, and
  lots of practice with graphs and equations
• Concepts build on each other, so its important to
  get the early stuff before moving on
• But when do we get to the good stuff?
• Later
• We will hint at the good stuff in this course.