Notes on Macroeconomics - Economic Concerns, Limit Alternative Choice | SS 141, Study notes of Introduction to Macroeconomics

Download Notes on Macroeconomics - Economic Concerns, Limit Alternative Choice | SS 141 and more Study notes Introduction to Macroeconomics in PDF only on Docsity! 1 SS141 Macro Economics Patrick Yanez - What are the US’s top 10 economic concerns Patrick Yanez today? Top 10 U.S. Economic Concerns 1. Recession 2. Unemployment 3. Stagnant Salaries 4. Credit crisis 5. Cost of U.S. wars/military Patrick Yanez 6. Lack of Universal Health Care 7. Loss of US competitiveness 8. Outsourcing Jobs 9. Lack of Affordable Housing 10. Social Security Chapter 1 Limits Alternatives Patrick Yanez Part 1: The Economizing Problem (Pages 4-10) Choices 2 Economics The social science concerned with how individuals, and society make optimal (best) choices under conditions of scarcity. Why study Economics? T d t d i t d t Patrick Yanez - o un ers an soc e y an governmen - To make adequate personal and professional decisions The “Traditional“ Economics Perspective Emphasizes 3 principles: 1. SCARCITY & CHOICE - Opportunity Cost 2. PURPOSEFUL, “RATIONAL” BEHAVIOR Utilit l h i ti f ti Patrick Yanez - y: p easure, app ness, sa s ac on 3. MARGINALISM (Benefits & Costs) - “Extra”, “additional”, “change in” Theories, Principles, and Models • Scientific method: • Observation of real-world behavior and outcomes • Formulation of hypotheses • Testing of hypotheses • Formulation of “Principles”, economic principles • Other methodological tools: Patrick Yanez • Generalizations • Ceteris Paribus: Other-things-being-equal • Graphic expressions Macroeconomics & Microeconomics Macroeconomics: examines the economy as a whole. Looks at “aggregates” (SS141) Microeconomics: looks at specific economic units, the consumer, the firm. (SS341) Economists develop principles and models at two levels: Patrick Yanez However… Positive Economics: focuses on facts and cause-effect relations. “What is” Normative Economics: focuses on value judgments and ideological preferences. “What should be”