Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved. Understanding Economics 5th edition by Mark Lovewell

Skills Resource Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Basics of Critical Thinking Critical thinking involves: precise meaning (i.e. “Say what you mean and mean what you say.”) logic (i.e. the use of logical arguments that move from one point to the next in a reasonable and orderly way) consideration of values and perspectives (i.e. recognizing and examining our perspectives, including our assumptions, and considering the perspectives of others.) Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Precise Meaning Terminology must be used correctly, as in: measure versus indicator average versus median average value versus marginal value real value versus nominal value Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Logic A close reader looks for the following problems: personal arguments (e.g. “This argument is wrong because a certain individual or group supports it.”) false analogy (e.g. “The economy is like a box of chocolates.”) false causation (“Because two things happen together, one must have caused the other.”) fallacy of composition (“What holds for an individual always holds for an economy.”) Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Consideration Examine your work and that of others for: clear explanation of opinions statement of specific assumptions use of emotional language distortions of fact, or faulty logic Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Economics as a Second Language The proper use of economics as a ‘second language’ depends on: precise definitions (needed when dealing with ambiguous terms such as ‘income equity’ and ‘full employment’) special meanings (e.g. ‘investment’) descriptive images (e.g. ‘human capital’) loaded language (e.g. ‘free market system’) Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Tables (a) Tables present information in columns and rows, with a heading appearing at the top of each column. Tables are ‘read’ left to right, with the independent variable first, at the left. Tables are sometimes called ‘schedules’. Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Tables (b) An example of a table: Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved. Sales of Compact Discs Price per CD ($) CDs Sold (no. of CDs)

Graphs (a) On a graph, the horizontal line (x-axis) and vertical line (y-axis) meet at the point of origin. Occasionally, in economics, the independent variable is placed on the y-axis and the dependent variable on x-axis. This reverses the usual mathematical convention. For example, price is often placed on the y-axis and quantity on the x-axis. Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Graphs (b) Curves (which include straight lines) are plotted by identifying the y-coordinate and x-coordinate of a range of representative points. Negatively sloped curves slope downward to the right and positively sloped curves slope upward. Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Slope and Vertical Intercept The slope of a line is found using the following formula: slope = change in y change in x A line’s vertical intercept, b, and slope, m, together provide an equation for plotting any point on the line: y = mx + b Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

The Formula for a Straight Line page xxvii Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved. 0 x line 3 (y = -.5x + 10) y line 1 (y = x) line 2 (y = 8)

Bar Graphs Numerical information can be presented in bar graph. In this case, a legend is included to identify the different types of bars. Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Sales of Discs, Cassettes and Downloads Page 7 Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Research When researching a topic: credit and footnote all sources decide whether the topic warrants primary research (the collection of “raw information”), secondary research (based on the work of others), or both consider the use of sources such as newspapers, business magazines, encyclopedias, Statistics Canada’s E-Stat resource, and websites of official organizations Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Using the Internet (a) The internet is a good source of data, including: Statistics Canada’s daily reports of information the Bank of Canada’s reports on current monetary policy the World Bank’s annual World Development Report Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Using the Internet (b) Credit internet sources in your work. References to an online source include the author’s name, article title, title of periodical or journal (where appropriate), date of publication or last update, publication medium (web), the document’s electronic address, and relevant page number (including the document’s total number of pages). Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Presentation Your work may be presented in an essay, oral presentation, or debate. In an essay, state your thesis clearly in your introduction and give necessary background. In a class presentation, structure your discussion using an outline. In a debate, you may be asked to argue either the affirmative or negative side of a formal proposition. Your purpose is to persuade, not create conflict. Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.

Skills Resource The End Copyright © 2009 by McGraw-Hill Ryerson Limited. All rights reserved.