1. PRINCIPLES OF MACRO Dr. Young Se Kim 6:30 – 9:20
WELCOME TO ECON 1110
PRINCIPLES OF MACRO
Dr. Young Se Kim
6:30 – 9:20

2. SYLLABUS Instructor: Young Se Kim Office: Etech 220 H Ph.# 565-2220
Office Hrs.: 1:00 – 3:00 TW and
by appointment
web site:

3. EXAM DATES Exam 1 - February 20th Exam 2 - April 3rd Exam 3 - May 1st
COMPREHENSIVE FINAL EXAM SATURDAY, May 6th at 2:00pm

4. GRADING POLICY 3 hourly exams (150 pts. each) 450 pts
Final Exam (comprehensive) 300 pts
Homework Assignments pts
Newspaper Assign. and Quizzes 100 pts
TOTAL possible pts

5. GRADING SCALE A = 1000 - 900pts B = 899 - 800pts C = 799 - 700pts
D = pts
F = 599pts or below

6. Newspaper Assign. and Quizzes
Short writing assignments based on current economic condition (30 pts)
Detailed instructions will be distributed
8 “unannounced” quizzes (70 pts)
Workbook and a number 2 pencil with you
No make-up quizzes

7. TEXTBOOK AND MATERIALS
Roger A. Arnold Macroeconomics UNT 7th edition
Principles of Macroeconomics Workbook 2006 edition
A Non-Programmable Calculator
Number 2 Pencils

8. HOMEWORK Homework assignments will be made on a weekly basis.
Assignments will come from the workbook and should be turned in on scantrons
I will supply the scantrons
Your name should appear on all scantrons
Last name, First name
An assignment sheet with all homework for the semester is on the web

9. TUTORING CENTER Principles Tutoring Lab – Etech 266
The lab is open from 8:30 – 6:30 Mon. & Wed., 8:30 – 5:00 Tues&Thurs., and 8:30 – 1:00 on Friday
Practice exams are available at

10. Principles of Macro ECON 1110 Spring 2006
Chapter 1
What Economics Is About

11. IMPORTANCE OF ECONOMICS
Good Citizenship in a Democratic Society
Improved personal decision making
Aids business decision making

12. MICRO vs. MACRO
MICROECONOMICS - the branch of economics that deals with the behavior and choices of an individual, firm, single industry, or market.
MACROECONOMICS - the branch of economics that deals with the aggregate behavior of the entire economy.

13. MICRO vs. MACRO (Example)
Macroeconomics does not try to answer the question of
a) why do some countries experience rapid growth
b) what is the rate of return on education
c) why do some countries have high rates of inflation
d) what causes recessions

14. MICRO vs. MACRO (cont.) Determinants of inflation
Relative market shares of GM and Ford
Amount of imports and exports between U.S. and Japan
Growth of total production in U.S.
Level of output a firm produces

15. Important Macro Concepts
Economic Growth
Unemployment
Inflation
Economic fluctuations
Productivity
Government Spending and Taxation
Monetary Policy

16. SCARCITY AND CHOICE
Unlimited Wants and Limited Resources Leads to SCARCITY
Scarcity Necessitates Choices
ECONOMICS is the study of CHOICES

17. Definition of Economics
the study of how individuals and society CHOOSE
to employ SCARCE RESOURCES to produce goods and services
and to DISTRIBUTE them among the members of society
Resources: any good or service that is useful in production or valued in consumption
Scarce: doesn’t exist in sufficient quantity to satisfy all desires to use it.

18. 4 CATEGORIES OF RESOURCES
LAND - natural resources
LABOR - physical and mental talents people contribute to the production process
CAPITAL - improvements to land such as buildings, machinery and tools
ENTREPRENEURSHIP - the talents that some people for organizing land, labor, and capital into new business opportunities.

19. THINKING LIKE AN ECONOMIST
Scarcity and its effect
- Need for a rationing device: dollar price
- Competition
Opportunity cost:
What one has to give up in foregone alternative when any action is taking
Ex) What is the opportunity cost to you of attending college?
What was your opportunity cost of coming to class today?

20. Opportunity Cost (Example)
Compact Disc (CD): $10 each
Cassette Tape (CT): $5 each
Opportunity cost of one CD?
Opportunity cost of five CDs?
Opportunity cost of one CT?
Opportunity cost of four CTs?

21. THINKING LIKE AN ECONOMIST
Costs and benefits of decisions
Decisions require comparing costs and benefits of alternatives.
- Whether to go to college or to work?
     - Whether to study or go out on a date?
     - Whether to go to class or sleep in?
Decisions at the margin
- Marginal changes are small, incremental adjustments to an existing plan of action
- Marginal Benefit (MB) vs. Marginal Cost (MC)

22. SCIENTIFIC THINKING
The Association-Causation Issue (Fallacy of False Cause)
- Association: if two events are linked or connected in some way
ex) wash your car at 10:00  starts to rain at 10:30

23. SCIENTIFIC THINKING Fallacy of Composition:
The erroneous view that what is good or true for the individual is necessarily good or true for the group
ex) tariffs
Ceteris Paribus Assumption:
All other things held constant or nothing else changes

24. According to the type of questions
ECONOMIC CATEGORIES
According to the type of questions
economists ask
POSITIVE ECONOMICS - the study of “what is” in economic matters.
NORMATIVE ECONOMICS - the study of “what should be” in economic matters.

25. IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE
The Stadium should be packed for Saturday’s UNT-UT Game.
The unemployment rate in Dallas is 5.3%.
A country as big as the United States should have a job for anyone that is willing to work.

26. IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE (cont.)
The federal budget deficit has decreased every year for the last 20 years.
The unemployment rate is too high.
The costs of medical care are increasing faster than the income of American citizens.
Lower income tax will generate greater income tax revenue for the government.

27. Assignment Get your Text and Workbook Read Chapters 1 - 3
Assignment 1: pp & 17-18

28. ANY QUESTIONS?