2. 1 - 1 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show The Nature and Method of Economics 1 C H A P T E R

3. 1 - 2 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show The Economics Perspective CHOICE OPPORTUNITY COST COST/BENEFIT RATIONAL BEHAVIOR MARGINAL ANALYSIS TRADE = WEALTH

4. 1 - 3 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show WHY STUDY ECONOMICS Adam Smith Karl Marx John Maynard Keynes Milton Friedman

5. 1 - 4 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show ECONOMIC METHODOLOGY Scientific Method Hypothesis Testing Theory Law Principles Models

6. 1 - 5 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Theories Facts Policy Economics Theoretical Economics ECONOMIC METHODOLOGY

7. 1 - 6 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Analytical Economics Terminology Generalizations ECONOMIC METHODOLOGY

8. 1 - 7 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus ECONOMIC METHODOLOGY

9. 1 - 8 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus Abstractions ECONOMIC METHODOLOGY

10. 1 - 9 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Analytical Economics Terminology Generalizations Other-Things-Equal ceteris paribus Abstractions Graphical Expression ECONOMIC METHODOLOGY

11. 1 - 10 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show ECONOMIC POLICY STATING GOALS POLICY OPTIONS EVALUATION

12. 1 - 11 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show What are our goals and objectives? ECONOMIC GOALS

13. 1 - 12 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Economic Growth Full Employment Economic Efficiency Price-Level Stability Economic Freedom Equitable Distribution Economic Security Balance of Trade ECONOMIC GOALS

14. 1 - 13 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show MACROECONOMICS...

15. 1 - 14 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show MICROECONOMICS... MACROECONOMICS...

16. 1 - 15 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Positive Economics Absolute Facts Normative Economics What Ought to be MICROECONOMICS... MACROECONOMICS...

17. 1 - 16 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Biases Loaded Terminology PITFALLS TO OBJECTIVE THINKING

18. 1 - 17 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Biases Loaded Terminology Definitions PITFALLS TO OBJECTIVE THINKING

19. 1 - 18 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Biases Loaded Terminology Definitions Fallacy of Composition PITFALLS TO OBJECTIVE THINKING

20. 1 - 19 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies PITFALLS TO OBJECTIVE THINKING

21. 1 - 20 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies Post Hoc Fallacy PITFALLS TO OBJECTIVE THINKING

22. 1 - 21 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show PITFALLS TO OBJECTIVE THINKING Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies Post Hoc Fallacy Chapter Conclusions

23. economics economic perspective marginal analysis scientific method theoretical economics principles generalizations other-things-equal assumption policy economics tradeoffs macroeconomics aggregate microeconomics positive economics normative economics fallacy of composition “after this, therefore because of this” fallacy ENDBACK Copyright McGraw-Hill/Irwin 2002

24. 1 - 23 The Economics Perspective Why Study Economics Economic Methodology Macroeconomics and Microeconomics Pitfalls to Objective Thinking Key Terms Previous Slide Next Slide End Show THE ECONOMIZING PROBLEM CHAPTER 2 COMING SOON