1. EC350 Introduction January 19, 2007

2. Course Website http://cstl-hcb.semo.edu/rsummary/ec350

3. “Modern market societies use force, tradition and authority as well as markets.” (quote from page 2 in textbook) What are some examples of force, tradition and authority? Force = illegal drugs, prostitution and gambling. Another instance of force may include war. Tradition = inheritance laws Authority = government involvement, fiscal and monetary policy, regulation

4. What is meant by "orthodox economics?" There is not complete agreement Maximization subject to constraints Neoclassical economics (micro) Keynesian economics (macro) Monetarism (macro) Models based on equilbria What you learned in EC215 and EC225

5. Heterodox economics includes those not in the mainstream, such as Austrian, Marxist, Institutionalists, Post- Keynesian The difference between heterodox and orthodox is generally one of focus – for example, orthodox generally takes external factors (e.g., social, political) as given, while heterodox may wish to examine those external factors

6. Heterodox Economics http://www.hetecon.com/http://www.hetecon.com/ Het Portal http://www.heterodoxeconomics.net/ http://www.heterodoxeconomics.net/ Het Society http://l.web.umkc.edu/leefs/htn.htm http://l.web.umkc.edu/leefs/htn.htm Het newsletter

7. Economic Methodology How do economists think?

8. Normative v. Positive Economics The Art of Economics – blends positive and normative for policy purposes

9. Inductive Reasoning Using specific propositions to infer general propositions This ice is cold therefore all ice is cold This crow is black therefore all crows are black I hang pictures from nails therefore all pictures hang from nails The premises may predict a high probability of the conclusion, but do not ensure that the conclusion is true. Induction occurs when we gather bits of specific information together and use our own knowledge and experience in order to make an observation about what must be true. Inductive reasoning is empirical.

10. Deductive Reasoning The conclusion is necessitated by, or reached from, previously known facts (the premises). If the premises are true, then the conclusion must be true. Socrates is a man. All men are mortal. Therefore, Socrates is mortal (valid) A cardinal is a bird. All birds have wings. Therefore a cardinal has wings. (valid) Every criminal opposes the government. Everyone in the opposition party opposes the government. Therefore, everyone in the opposition party is a criminal. (invalid) Deductive reasoning is logic

11. Our Framework of Analysis What are the questions that the writer is asking? What are the assumptions that the writer is making? What is the economic/political/cultural/social environment of writer? What is the role of the market? What is the role of the government?