Econ 200, Week One Notes
Econ 200, Week One Notes ECON 200
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This 2 page Class Notes was uploaded by Charles Smith on Saturday September 3, 2016. The Class Notes belongs to ECON 200 at James Madison University taught by in Fall 2016. Since its upload, it has received 155 views. For similar materials see Introduction to Macroeconomics in Economics at James Madison University.
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Date Created: 09/03/16
ECON 200 Teacher Notes: Our PASS Instructor is named Kara. Her email is email@example.com. She provides study help and it is primarily organized through email. This class is NOT easy. Take it seriously. Do your absolute best to keep on track with reading and assignments. Most of the inclass practice problems will be the bases for the test material. Tests are VERY important in this class. Most other assignments are practically extra credit. Anything and Everything taught or assigned can/will be tested. Laptops are allowed in class. Needed for use in some nonschool assignments. If you do not have a laptop, please contact the teacher at firstname.lastname@example.org. The Main focus you should have in class when answering questions, isn't the “correct” morality, but what choice has the least or less damaging outcomes. Dr. Gochenour provides sites and resources to help students. There will be a quiz on the syllabus, online with date TBD. Syllabus Highlights: Office Hours: 25 p.m. Tuesdays and Thursdays @ Showker Hall 439. Microeconomics is a subset of different things related to finance and marketing. Day One Notes: 10 Big Ideas in Economics: 1) Incentives Matter People respond to incentives in predictable ways. Selfinterest is an important incentive in economics. ● “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Adam Smith, 1776 2) Good Institutions align social interest with self interest. Markets Magically align your self interest with social interest (usually). For example, because a cheese monger, (or other service/good provider) wants a profit; you get your cheese, (or other good/service). 3) Tradeoffs are everywhere. For every choice something is gained and something is gained. The opportunity costs of a choice; the value of the opportunities lost. AND people respond to changes in opportunity in similar ways. HOWEVER, there isn’t an exact matchup. Think about all decisions in terms of opportunity costs. Factors that affect opportunity costs are called covariates. 4) Thinking on the Margin Thinking “on the margin.” Marginal means small changes, either additional or less. Most economic choices are marginal choices. E.G. If drug dealers automatically faced the death penalty, what's to stop them from ALSO committing murder? 5) The Power of Trade Selfsufficiency is the beginning stages of death to an economy. Without needing to go through multiple channels, the value of money and time can make drastic, and occasionally devastating changes. Trade, however, allows us to increase production through specialization. Allowing certain groups/parties to specialize in one or another market, provides a necessary focus. That focus gets developed and others don’t need to be bothered with. Say a heart surgeon needs his car fixed. Sending his car to a mechanic instead of trying to learn how to do it himself on the same day he has four surgeries makes it beneficial to all parties involved. 6) The importance of Wealth and Economic Growth Wealth brings high standards of living. GDP per capita= Gross Domestic Product per capita= How much the average person in that group makes in a year. 7) Institutions Matter Why is an area rich as opposed to poor? Occasionally, they are lacking incentives. Strong institutions factor the cost opportunities and incentives to stimulate economic growth. 8) Economic Boosts and Busts Cannot be avoided but can be moderated. Policy makers use Fiscal Policy and Monetary Policy to attempt to smooth out this economic volatility, (to prevent booms and busts). 9) Prices rise when the government prints too much money. Inflation an increase in the general level of prices. Too much money and too little supply of goods causes inflation, i.e. “If they can't afford it, they won't buy it all!” 10)Central banking is a hard job. The Federal Reserve is the US’s central bank. Yes, Its job is hard. The federal reserve attempts to fix the failing economy but it is rather unpredictable, making it an almost impossible thing to fix. 11)“Economics is fun” Economics helps us understand the complex, interconnected, world around us. Which of course, can actually, be fun. Incentive in Prisoner Transport Business ONLY when the ship captains were paid per LIVING captive upon arrival, did the death rate fall from a reported 33% to only 1%. A Dramatic increase in living arrivals. NOTE: SYLLABUS QUIZ DUE BEFORE MONDAY (SUNDAY AT 11:59 P.M.)