1. Economics
CIA4U

2. Econ Movie –Star Wars (Overall Intro)

3. What is it?
A practical science dealing with the production, distribution and use of goods, services, resources and wealth.
“science of scarcity and choice”
Its how individuals, people, businesses etc make decisions about the use of scarce resources

4. In Greek
Goes back to meaning “house” and “to manage”

5. Social Science
Economics involves the study of people (individuals or groups) making decisions about the choices available to them.
The social aspect of the study gives economics both relevance and complexity
-becomes complicated when trying to balance out needs of a variety of groups. Eg environmentalist vs logger

6. Economy Very complex or intricate system
Dynamic or subject to movements and exchanges
Consists of interdependent people, groups, and institutions each performing a specialized roles
Involves a series of independent transactions motivated by economic goals
Involves numerous transactions that create two circular flows (money moves in one direction while goods and services move in the opposite direction

7. Macro Economics
is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation.

8. Micro Economics
is the study of individuals, households and firms' behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

9. Resources and Scarcity
Economics looks at resources and tries to not waste them
It distinguishes between effective and efficient use of resources.
Effective: we consume a certain amount of resources and at the end we achieved the desired result
Efficient: we use the bare minimum of resources to get it

10. Opportunity Costs
Given that most resources in the world, are limited, effectiveness and efficiency must be both used in order to achieve the right goals
Opportunity Costs: the sum of all that is lost from taking one course of action over another.
In economics it is important to consider not just what gaining but also what stand to loose.

11. Facts and Values
-Economists use both facts and values to explain human behaviour and decision making in relation to the scarcity of goods
-(Facts) Analytical Economics: (positive) –direct observation of the world around us
Descriptive: statements that portray things as they are in the present or have been in the past. Eg “Car sales in Canada in this quarter are 7% higher than in the last quarter”
Conditional: forecasts based on the careful analysis of economic behaviour. “If x occurs, then y will follow”

12. Normative Economics
(policy) –deals mainly with statements that contain value judgements.
Goals and policy statements of governments, firms, institutions etc are usually based on value judgements. Eg. “Municipal governments should provide more housing for homeless people.”

13. Basic Fallacies
Fallacy: is a hypothesis that has been proven false but is still accepted by many people because it appears, at first glance, to make sense.

14. The Fallacy of Composition
What is good for the individual is not automatically good for society as a whole.
Eg Each brick in that building weighs less than a pound.  Therefore, the building weighs less than a pound.

15. Post Hoc Fallacy
The false assumption that what comes before automatically causes what follows.
Eg. I had been doing pretty poorly this season. Then my girlfriend gave me this neon laces for my spikes and I won my next three races. Those laces must be good luck...if I keep on wearing them I can't help but win!
Eg 2. Joan is scratched by a cat while visiting her friend. Two days later she comes down with a fever. Joan concludes that the cat's scratch must be the cause of her illness.

16. Fallacy of Single Causation
A single factor or person causes a particular event to occur.
Eg.  the music industry might claim that peer-to-peer file sharing is the cause of a loss in profit whereas factors such as a growing video game market and economic depression are also likely to be major factors.

17. Crash Course