1. Wissink Economics 301- Intro

2. About Economics & This Course
So what is this course about?
(And what is it not about?)
My working title: Advanced Introduction to Applied Microeconomic Theory

3. About Economics & This Course
Theory: We will construct models.
Look at the world and decide what it is we want to explain or predict
identify important variables
state assumptions that govern the model
make hypotheses
analyze the model
use the model to make predictions
and then see if the model holds up under empirical scrutiny.

4. About Economics & This Course
Economic(s): The study of the allocation of scarce resources to produce commodities to satisfy infinite human wants.
Classic definition.

5. About Economics & This Course
MACRO VS. MICRO
Micro: Looks at small pieces of the puzzle, individual markets
Three basic micro questions:
What?
How?
For Whom?
How will be decide?
How will we like the final allocation?

6. About Economics & This Course
Macro: the study of the determination of economic aggregates and how they relate to each other and how the government and the exogenous environment affects these aggregates
Macro examines the factors that determine
total national output, or total national product
total national income
price levels
unemployment
interest rate levels
the business cycle

7. About Economics & This Course
Applied: Where and when we can, we will apply what we are learning to the real world economy.
Introduction: Getting you started, getting you familiar, getting you acquainted.
Advanced: Will use math without apology.

8. Why Study Economics? Economics is everywhere.
It’s requirement!? Prerequisite!?
To help you understand how economists think and construct arguments.
To understand how markets and the economy work.
To create a foundation to help you differentiate good from bad analysis and policy prescriptions.
To get a better understanding of the economics problems faced by modern societies: domestic and globally.
To better understand the government's and an economy’s ability to: promote growth, maintain high levels of economic activity, maintain high levels of employment, maintain stable prices, and promote improved quality of life.

9. On Modeling & Constructing Theories
Simplistic Model Construction
Ockham’s Razor
Evaluation of Models
economics is a social science
Two pitfalls to avoid:
the fallacy of composition
post hoc ergo propter hoc mistakes
Positive vs. Normative analysis is
ought to be