1. 1-4: Economist’s Toolbox  Everybody engages in economics (decisions)  Economists study these decisions and look to explain or even predict econ. Outcomes  Economist use: Statisitics: Numerical data or information (trends) Econ. Models: Simplified representations of complex econ. Forces (Limited variables, Charts, Tables, Graphs (Line, Bar, Pie)

2. Economist’s Toolbox Which type of graph would you use? Ethnicities of students at KO Compare salaries of college educated men and women Display the budget of the National Government Growth in the sale of hybrid cars since 1995 How might the use of statistics benefit you down the road?

3. Economist’s Toolbox  2 components of economics:  1) Microeconomics (Small scale)- The study of the behavior of individual econ. Actors (indiv., households, business, industry)  2) Macroeconomics (Large Scale)- The study of the behavior of the economy as a whole

4. Micro or Macro??  A study on how coffee prices affect the whole economy  A study of how coffee prices affect competition amongst coffee shops  Why a large corporation went bankrupt  Overall unemployment stats for the U.S.  The spending behavior of an unemployed person  Stats showing how well the country is doing at creating jobs or increasing exports  Studying stats on gas sales and hotel bookings to see the impact of higher gas prices on tourism  Inflation rates  Why the price of orange juice recently increased

5. Economist’s Toolbox  Positive Economics: A way of explaining econ. as it is, not as it should be (Verifiable facts, not opinion)  Normative Economics: A way of explaining what econ. Behavior ought to be, not actually what it is (