The Economics P

erspective
Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
1 CHAPTER

The Nature and

Pitfalls to Sound
Reasoning
Key Terms

Method of
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The Economics P
erspective
Why Study Econ
omics
Consider...
The Economics Perspective
• SCARCITY & CHOICE
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
• RATIONAL BEHAVIOR
Key Terms
• UTILITY
• MARGINAL ANALYSIS
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Marginal Benefits &
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Marginal Costs
Copyright McGraw-Hill/Irwin, 2005
 WHY STUDY ECONOMICS
The Economics P
erspective
•Adam Smith
•David Ricardo
Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
•John Stuart Mill
Pitfalls to Sound
Reasoning
Key Terms
•Karl Marx
•John Maynard Keynes
plus many modern contributors...
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Economics for Citizenship
End
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 ECONOMIC METHODOLOGY
The Economics P
erspective
Why Study Econ
Scientific Method
Hypothesis Testing
omics
Economic Metho
dology
Macroeconomics
and Microecono

Theory
mics
Pitfalls to Sound
Reasoning
Key Terms

Law
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Principles
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Models
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 ECONOMIC METHODOLOGY
The Economics P
erspective Policy Economics
Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Theoretical Economics
Key Terms
Theories

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Facts
1-5
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 ECONOMIC METHODOLOGY
The Economics P
erspective
Why Study Econ
Analytical Economics
Terminology
omics
Economic Metho
dology

Generalizations
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Key Terms

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End
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Copyright McGraw-Hill/Irwin, 2005
 ECONOMIC METHODOLOGY
The Economics P
erspective
Why Study Econ
Analytical Economics
Terminology
omics
Economic Metho
dology

Generalizations
Macroeconomics
and Microecono
mics
Pitfalls to Sound

Other-Things-Equal
Reasoning
Key Terms

ceteris paribus
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Copyright McGraw-Hill/Irwin, 2005
 ECONOMIC METHODOLOGY
The Economics P
erspective
Why Study Econ
Analytical Economics
Terminology
omics
Economic Metho
dology

Generalizations
Macroeconomics
and Microecono
mics
Pitfalls to Sound

Other-Things-Equal
Reasoning
Key Terms

ceteris paribus
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Abstractions
End
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Copyright McGraw-Hill/Irwin, 2005
 ECONOMIC METHODOLOGY
The Economics P
erspective
Why Study Econ
Analytical Economics
Terminology
omics
Economic Metho
dology

Generalizations
Macroeconomics
and Microecono
mics
Pitfalls to Sound

Other-Things-Equal
Reasoning
Key Terms

ceteris paribus
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Abstractions
End
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Graphical Expression
Copyright McGraw-Hill/Irwin, 2005
The Economics P
ECONOMIC POLICY
erspective

STATE THE GOAL

Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Key Terms
POLICY OPTIONS

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IMPLEMENT &
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EVALUATE
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 ECONOMIC GOALS
The Economics P
erspective
Why Study Econ
omics

What are our

Economic Metho
dology
Macroeconomics
and Microecono

goals and
mics
Pitfalls to Sound
Reasoning

objectives?
Key Terms

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Copyright McGraw-Hill/Irwin, 2005
 ECONOMIC GOALS
The Economics P
erspective •Economic Growth
•Full Employment
Why Study Econ
omics
Economic Metho
dology T
Macroeconomics
and Microecono •Economic Efficiency R
A
mics
Pitfalls to Sound
Reasoning •Price-Level Stability D
•Economic Freedom E
Key Terms

O
•Equitable Distribution F
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•Economic Security F
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The Economics P
erspective
MACROECONOMICS...
Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Key Terms

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The Economics P
erspective
MACROECONOMICS...
Why Study Econ

MICROECONOMICS...
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Key Terms

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End
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The Economics P
erspective
MACROECONOMICS...
Why Study Econ

MICROECONOMICS...
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
Reasoning
Key Terms
Positive Economics
Absolute Facts
Normative Economics
What Ought to be
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 PITFALLS TO
The Economics P
erspective
Why Study Econ
SOUND REASONING
omics
Economic Metho
dology
Biases
Macroeconomics
and Microecono
mics
Loaded Terminology
Pitfalls to Sound
Reasoning Definitions
Fallacy of Composition
Key Terms

Causation Fallacies
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Post Hoc Fallacy
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Correlation vs. Causation
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economics policy economics
economic perspective tradeoffs
utility macroeconomics
marginal analysis aggregate
scientific method microeconomics
theoretical economics positive economics
normative economics
principles
fallacy of composition
generalizations “after this, therefore becaus
other-things-equal assu e of this” fallacy
mption
Copyright McGraw-Hill/Irwin, Inc. 2005 BACK END
 CHAPTER 2
The Economics P
erspective

THE
Why Study Econ
omics
Economic Metho
dology
Macroeconomics
and Microecono
mics
Pitfalls to Sound
ECONOMIZING
PROBLEM
Reasoning
Key Terms

COMING SOON
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