Econ Alive Chapter 1 section 3 How Can You Think Like An Economist An economic enigma is a puzzle Something that can be solved using the 7 principles of economic thinking One of my former students called it a contradiction Looks like one thing ID: 732733
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Slide1
The 7 Principles of Economic ThinkingEcon Alive Chapter 1 section 3
How Can You Think Like An Economist?Slide2
An economic enigma is a puzzle Something that can be solved using the 7 principles of economic thinking
One of my former students called it a contradiction. Looks like one thing
turns out to be the opposite.
What is an Economic Enigma?Slide3
# 1 Scarcity forces trade-offs
Because we cannot get all of the stuff we need or want, we must choose between that which we get and that which we must give up.
Like when selecting that most important of devices the cell phone. Android or
iphone
?Slide4
# 2 Cost Versus BenefitCell phone perhaps + data and other costs
Will the reward outweigh the financial outlay?
What will it cost me to select this particular item?
What will I get in return for my Money or time?Slide5
# 3 Thinking at the Margin (another one)
Will getting one more for the price be worth it?
Maybe I shouldn’t have eaten that 15
th
piece Marginal Cost- expenditure for one additional item like shoes or pieces of pizza.Marginal Benefit-
What do I actually receive when paying for that additional item?Slide6
# 4 Incentives MatterAmerica’s Most Wanted
Black Friday following Thanksgiving
People respond in predictable ways to what Economists call incentives.
Offer a reward for finding someone and more people begin looking.
If you want more people to come to your store…Or to buy more
stuff…
Then have a sale
Quid Pro QuoSlide7
Do you do everything for yourself?Make your own clothes? Farm your own crops?
Of course not. Why not? TMPBO that’s why!
# 5 Trade Makes
People Better O
ffSlide8
# 6 Markets Coordinate TradeDon’t forget malls and outlet malls
As well as
facebook
, twitter, as advertising tools
If you build it…Ebay and electronic make all of that easierThey will come…
Amazon . Com also has taken the world by stormSlide9
# 7 Future Consequences Count
Think about what COULD result
What’s best in the
long run?
Like Playing checkers, there is more to consider than just if you can jump or not…Perhaps your move will lead your opponent to an even better move…Or lure him into a trap!