Presentation on theme: "PRINCIPLES OF MACRO Dr. Young Se Kim 6:30 – 9:20"— Presentation transcript:
1PRINCIPLES OF MACRO Dr. Young Se Kim 6:30 – 9:20 WELCOME TO ECON 1110PRINCIPLES OF MACRODr. Young Se Kim6:30 – 9:20
2SYLLABUS Instructor: Young Se Kim Office: Etech 220 H Ph.# 565-2220 Office Hrs.: 1:00 – 3:00 TW andby appointmentweb site:
3EXAM DATES Exam 1 - February 20th Exam 2 - April 3rd Exam 3 - May 1st COMPREHENSIVE FINAL EXAM SATURDAY, May 6th at 2:00pm
4GRADING POLICY 3 hourly exams (150 pts. each) 450 pts Final Exam (comprehensive) 300 ptsHomework Assignments ptsNewspaper Assign. and Quizzes 100 ptsTOTAL possible pts
5GRADING SCALE A = 1000 - 900pts B = 899 - 800pts C = 799 - 700pts D = ptsF = 599pts or below
6Newspaper Assign. and Quizzes Short writing assignments based on current economic condition (30 pts)Detailed instructions will be distributed8 “unannounced” quizzes (70 pts)Workbook and a number 2 pencil with youNo make-up quizzes
7TEXTBOOK AND MATERIALS Roger A. Arnold Macroeconomics UNT 7th editionPrinciples of Macroeconomics Workbook 2006 editionA Non-Programmable CalculatorNumber 2 Pencils
8HOMEWORK Homework assignments will be made on a weekly basis. Assignments will come from the workbook and should be turned in on scantronsI will supply the scantronsYour name should appear on all scantronsLast name, First nameAn assignment sheet with all homework for the semester is on the web
9TUTORING CENTER Principles Tutoring Lab – Etech 266 The lab is open from 8:30 – 6:30 Mon. & Wed., 8:30 – 5:00 Tues&Thurs., and 8:30 – 1:00 on FridayPractice exams are available at
10Principles of Macro ECON 1110 Spring 2006 Chapter 1What Economics Is About
11IMPORTANCE OF ECONOMICS Good Citizenship in a Democratic SocietyImproved personal decision makingAids business decision making
12MICRO vs. MACROMICROECONOMICS - the branch of economics that deals with the behavior and choices of an individual, firm, single industry, or market.MACROECONOMICS - the branch of economics that deals with the aggregate behavior of the entire economy.
13MICRO vs. MACRO (Example) Macroeconomics does not try to answer the question ofa) why do some countries experience rapid growthb) what is the rate of return on educationc) why do some countries have high rates of inflationd) what causes recessions
14MICRO vs. MACRO (cont.) Determinants of inflation Relative market shares of GM and FordAmount of imports and exports between U.S. and JapanGrowth of total production in U.S.Level of output a firm produces
15Important Macro Concepts Economic GrowthUnemploymentInflationEconomic fluctuationsProductivityGovernment Spending and TaxationMonetary Policy
16SCARCITY AND CHOICEUnlimited Wants and Limited Resources Leads to SCARCITYScarcity Necessitates ChoicesECONOMICS is the study of CHOICES
17Definition of Economics the study of how individuals and society CHOOSEto employ SCARCE RESOURCES to produce goods and servicesand to DISTRIBUTE them among the members of societyResources: any good or service that is useful in production or valued in consumptionScarce: doesn’t exist in sufficient quantity to satisfy all desires to use it.
184 CATEGORIES OF RESOURCES LAND - natural resourcesLABOR - physical and mental talents people contribute to the production processCAPITAL - improvements to land such as buildings, machinery and toolsENTREPRENEURSHIP - the talents that some people for organizing land, labor, and capital into new business opportunities.
19THINKING LIKE AN ECONOMIST Scarcity and its effect- Need for a rationing device: dollar price- CompetitionOpportunity cost:What one has to give up in foregone alternative when any action is takingEx) What is the opportunity cost to you of attending college?What was your opportunity cost of coming to class today?
20Opportunity Cost (Example) Compact Disc (CD): $10 eachCassette Tape (CT): $5 eachOpportunity cost of one CD?Opportunity cost of five CDs?Opportunity cost of one CT?Opportunity cost of four CTs?
21THINKING LIKE AN ECONOMIST Costs and benefits of decisionsDecisions require comparing costs and benefits of alternatives.- Whether to go to college or to work? - Whether to study or go out on a date? - Whether to go to class or sleep in?Decisions at the margin- Marginal changes are small, incremental adjustments to an existing plan of action- Marginal Benefit (MB) vs. Marginal Cost (MC)
22SCIENTIFIC THINKINGThe Association-Causation Issue (Fallacy of False Cause)- Association: if two events are linked or connected in some wayex) wash your car at 10:00 starts to rain at 10:30
23SCIENTIFIC THINKING Fallacy of Composition: The erroneous view that what is good or true for the individual is necessarily good or true for the groupex) tariffsCeteris Paribus Assumption:All other things held constant or nothing else changes
24According to the type of questions ECONOMIC CATEGORIESAccording to the type of questionseconomists askPOSITIVE ECONOMICS - the study of “what is” in economic matters.NORMATIVE ECONOMICS - the study of “what should be” in economic matters.
25IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE The Stadium should be packed for Saturday’s UNT-UT Game.The unemployment rate in Dallas is 5.3%.A country as big as the United States should have a job for anyone that is willing to work.
26IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE (cont.) The federal budget deficit has decreased every year for the last 20 years.The unemployment rate is too high.The costs of medical care are increasing faster than the income of American citizens.Lower income tax will generate greater income tax revenue for the government.
27Assignment Get your Text and Workbook Read Chapters 1 - 3 Assignment 1: pp & 17-18