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Introduction To Economics: Professor Hedrick SS 424
Introduction To Economics: Professor Hedrick SS 424
Professor Hedrick
SS 424
Instructional Method
Primarily Lecture format with discussion,
simulations, and video presentations
Constructive discussion is welcomed
Grading is based on five mini-exams and Aplia
Homeworks. NO MAKEUPS GIVEN
Professor available during office hours and by
appointment
Suggestions for the study of economics
What is Economics?
Scarcity a basic human dilemma
Limited resources vs. unlimited wants
The human condition requires making choices
Definitions of Economics
Mankiws definition
is the study of how society manages its scarce resources
Hedricks definition
is how society chooses to allocate its scarce resources among
competing demands to improve human welfare
Alternative definitions
what economists do.
is the study of choice.
WHFM Questions
Rational Behavior
Weighing benefits and costs and maximizing total net benefits
Marginal vs. Total Thinking
Normative Economics
Prescriptive - what the world ought to be like
Subjective value judgments must be made
Normative statements cannot be tested appealing to
facts.
.
Principle #4 People respond to incentives
Reactions to changes in marginal benefits and costs
Increases (decreases) in marginal benefits mean more
(less) of an activity
Increases (decreases) in marginal costs mean less
(more) of an activity
Example of seat belts leading to increased speeds
Example of SUV (with child car seat) in Issaquah
Markets
Principles 1-5 combine with markets to turn the pursuit
of self-interest into promoting the interests of society
Adam Smith and the invisible hand
creativity and productivity are stimulated by the pursuit
of self-interest into improving resource allocations
set it and forget it becomes compete or be obsolete
in some cases markets fail to allocate resources
effectively so,