Chapter 1 Economics Defined
Test Review Notes Chapters 1-7
Return to
Economics Internet Library    
2/28/19     
Please link to, use to educate, Share!   

I. Basic Terms  3 Videos

II. Economic Models 1 Video

II. United States Economic Goals  1 Video

IV. Economic Disciplines  4 Videos

V. Why Economist Disagree 1 Video

VI. Sundry Materials 2 Videos

Math Review R. L. Reynolds, Boise State

Macro Review 11 min comprehensive video


I. Basic Terms
       A. Economy is the social science concerned with the use of
           scarce resources like land and labor to fulfill unlimited human.
       B
. Resources are the inputs, want satisfaction is the output 
       C. Key Concepts for understanding and analysis
     
    1. Scarcity of resources results in the need for choices by participants.
          2. Purposeful behavior by participants (buyers and sellers) is exhibited
              to enhance their own rational self interest.
              See
Economics in the dock 6 min video
          3. Marginal analysis where the change in benefit received is balanced
              with the change in cost is a common purposeful behavior.

             
See Margins and Thinking at the Margin
          4. Fallacy of composition: applying to the whole that which is true for
              a part without adequate proof. 1 and 3 are odd numbers, so four is
              odd number.
This fallacy is the basis of police profiling. See
              Why Do People Continue to Believe Stupid Economic Ideas -
              Mark Blyth 5 min video
          5.
Fallacy of division:
This is the assumption that if something is true
              for the whole then it must be true for its parts. The absolutely worst
              abuse here involves inferring from an average that all elements are
              average.
          6. Post hoc fallacy: Assumption that correlation proves causation.  
              This is related to the concept in law of circumstantial evidence.
          7. Cum Hoc Fallacy :simultaneous correlations while post hoc refers
              to sequential correlations.
          8.
Logical fallacyis a pattern of reasoning rendered invalid by a flaw
              in its
logical structure that can neatly be expressed in a standard
              logic
 system
     D. Economic methodology 
         1. Positive economics 
             a. What something is
 
             b. Objective, can be measured
            
c. Example: measuring disposable personal income which is an 
                 individual's salary after taxes
             d. A Theorem on the Methodology of  Positive Economics
         2. Normative economics
             a. What something ought to be 
             b. Subjective, difficult to measure 
             c. Requires value judgments by citizens, Political Action Committees
               (PAC's), politicians, economists, etc.
             d. Examples: should the minimum wage be increased, should
                 defense spending increase and social spending be lowered

        
3. Descriptive economics
             a. Looking at the real-world to develop Economic Theory
             b. Economic Theory
                 1. Generalizations concerning economic behavior based upon real
                    -world observations, empirical by nature
                 2. Economic theories are objective "positive economics"
                 3. Assumes behavior is rational and economic (self-serving)
                 4. Example: as the price of a product increases, consumers tend
                     to buy less
             c. Economic Policy
                 1. Application of economic theory to solve economic problems
                 2. Economic policies are subjective, "normative economics".
                 3. How society makes economic choices such as in the 1980's
                     when spending for the elderly (Social Security) increased 
                     and spending for children (Head Start) decreased 1234

        
4. Using Statistics
             1. Why Do Economists Use Statistics?
             2. Common Errors interpreting Statistics
             3. Beginning with video 3 the series, statistics
                 are used in a questionable manner to analyze
                 to current economic issues of concern to Libertarians.

Unit I. Review Economics, Resources, Scarcity, Rational Self Interest,
Marginal Analysis, Fallacy of Composition Fallacy of Division,
Post Hoc Fallacy, Cum Hoc Fallacy

 

Economic Models
       A. Definition
           
1. Simplified generalizations to represent of real-world economic activity
           2. Requires Ceteris Paribus: Latin for holding other economic variables constant
               See Ceteris Paribus Trap

       B. Designing Models
           1. Models may be quantities or qualitative
           2. Economic Models 3 minute video

          
3. Three Pitfalls to model analysis 
              
a. Restrictive, unrealistic assumptions 
              
b. Omitted details  
              
c. Are economic models falsifiable?
         
4. Model representations are not always correct
               a. Are economic models falsifiable?
              
b. Pfleiderer on The Misuse of Economic Models 1 hour podcast

               c. Models such as the Production Possibility Curve chapter 2 and supply
                   and demand, chapter 3, explained in the next chapter provide a simplified
                   description of how some aspect of an economy works.
              
d. Beware of economic textbooks 11/30/14
              
e.
Why Do People Continue To Believe Stupid Economic Ideas?  4/17 Mark Blyth
               g.
Economics Rules: the rights and wrongs of the dismal science
               h.
Economists And Statistical Tests Are Bias 4/3/18

Unit II. Review Simplified generalizations represents real-world
 economic activity requiring Ceteris Paribus or holding other
 economic variables constant

III. United States Economic Goals
   
A. Employment Act of 1946 set goals in response to a
           Soviet 5-year economic plans.
      B. Humphrey Hawkins Act of 1978 added goals.
          1. Economic growth
          2. Full employment of all economic resources
          3. Price stability (low inflation)
          4. Positive balance of payments (international flow of dollars)
          5. Economic freedom
          6. Equitable distribution of income
          7. Economic security (if you have A through F, you have G)
     C. Economic Report of the President

Please  Share!

Unit III. Review Economic growth, Full employment of
all economic resources, Price stability (reasonable inflation),
Positive balance of payments, Economic freedom,
Equitable distribution of income Economic security

Image result for Voodoo Economics cartoons

 

Politics or Political Economy
 
is a battle between Positive Economics and Normative economics which ends with economic policy. Opinions on political economy questions like those depicted here and by
2016 Election Issues in One-Page.

Image result for Voodoo Economics cartoons

 

Theory Notes Only
1-2 pages per chapter
No Internet Links, Pictures

Macro   Ch 1-7
   
Ch 8 -13    Ch 14-18

Micro   Ch 19-22   Ch 23-29   Ch 30-33

 

Justice Brandies' Gilded Age Observation

Louis D. Brandeis quote: We can have democracy in this country, or we can have great...

Is becoming a predominant 21st Century belief?

 

 

As a kid in the 1950's we didn't have a TV so I only saw one when I visited my cousin. Eventually my dad realized they wouldn't destroy education and we got a 12 inch set.

Economic Policies have improved TV's, made them a necessity, even on a phone. Is your watch next?

 

 

Other Stuff

Understanding Fake News

Wages Stagnation As Fake News

Economics Video Lectures,

History of Capitalism
Videos from Cornell


One-Page Chapter Review

Macro Test Review 1

Macro Test Review 2
 
Macro Test Review3

Micro Test Review 1
 
Micro Test Review 2

Micro Test Review 3

 IV. Important Economic Disciplines

Meconomicacros1
is the study of 
total economic activity.

Microeconomics2 
 is the study of individual segments of the economy.

Macro and Micro are 
Applied as Follows

Sources of Current Economic Information

Macro Activity Micro Activity Schools of Economic Thought
 and Methodology
2016 Economic Trends Cleveland FED
1. Inflation rate 1. A product's price Econometricians Economicpopulist.org/ Articles, Videos
2. Economic growth 2. Pollution Behavioral Economists
Behavioral- Economics 3 min
Behavioral Economics? 4 min
How Behavioral Economics Changed The World 85 min video
Regional Economist and Economic Synopses
FRED down load FED data St. Louis FED
3. Total employment 3. Poverty International Economics Library of Economic Liberty Much Stuff
4. The  business cycle 4. A competitive market Labor Economics
Forensic Economics
Center for Economic and Policy Research
ACDC Introduction to Macro 98 m Video  What is Microeconomics 1:54 Video Public Economics U.S. Political Economy one-page on varied topics
1  Wiki explanation is extensive, for now, the first few paragraphs are sufficient.

2 Wiki explanation is extensive, for now, the first paragraph is sufficient.

Financial Economics textbooksfree.org/ much free stuff

See How Economy Works 30 min video

See What is Economics? 

Economics is for Everyone 11.min video

 

Unit 4 Review Macroeconomics: Employment, Growth, Inflation, Cycles
 
Microeconomics: A products price, pollution, poverty, market types,

 V. Why Economist Disagree? 1 hour 8 minutes video
        A. Economics is for Everyone!
        B. The rights and Wrongs of the dismal Science

VI. Sundry Materials    
      A. Economics Glossary from Amosweb 

    
  B. Video Review 9.08 Video
   
   C. Outside Reading

          1. Economic Classics
Economic Classics from 1984 to The Worldly Philosophers plus 7 videos
          2. Success and Failure of Social Systems Hopium economics
          
6. Can Economics Be Ethical?
     
D.
The History of Economics 9 minute Video Adam Smith, David Ricardo,
           John Stuart Mill, William Stanley Jevons, Alfred Marshall and
           Lord John Maynard Keynes are considered. 

     
E. The Assent of Money: A Financial History of World 4 hour Video
      F.
Economists Do It With Models is an interesting blog
      G.
Quick History of Economics
      H. Women in Economics

       I. Building America's Democratic Federalist Republic
 
          1. The Early Colonial Period
           2. Determining Political Power and "We the People"
          
3. Increasing We" of "We the People"

           4. Thomas Jefferson Leader of the Opposition

           5. Constitutional History of Our Democratic Federalist Republic
           6. Capitalistic Democracy
           7. One page review of the basics of Our Democratic Federalist Capitalist Republic for more see
              Characteristics of Market System Capitalism and Political Economy
 
 

Chapter 1 Class  Discussion Questions

Free Stuff 
For Students

Our
Free Internet Libraries  
improve grades 
and careers.
  

Chapter 1 Homework Questions

Next Chapter  
Economizing Scarce Resources   

Table of Contents

Economics Internet Library