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The 7 Principles of Economic Thinking The 7 Principles of Economic Thinking

The 7 Principles of Economic Thinking - PowerPoint Presentation

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Uploaded On 2018-12-31

The 7 Principles of Economic Thinking - PPT Presentation

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: 746749

economic people cost item people economic item cost thinking malls phone marginal trade additional reward enigma incentives principles

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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!