Welcome Introduction to Economics EFA 3 Prof Dr

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Welcome Introduction to Economics @ EFA 3 Prof. Dr. Peter Schmidt Introduction/Review Principles of

Welcome Introduction to Economics @ EFA 3 Prof. Dr. Peter Schmidt Introduction/Review Principles of Economics, Microeconomics

WHY study Economics ? What‘s it about ? What do you know? What do

WHY study Economics ? What‘s it about ? What do you know? What do you expect?

Business Environment

Business Environment

Introductions. . . u Economics u Lecturer u Students

Introductions. . . u Economics u Lecturer u Students

Module Description: Learning Outcomes

Module Description: Learning Outcomes

Module Description: Contents

Module Description: Contents

Who am I Peter Schmidt Economics & Statistics market. research. culture

Who am I Peter Schmidt Economics & Statistics market. research. culture

You u are highly motivated students u have to carry your individual workload:

You u are highly motivated students u have to carry your individual workload:

schmidt-bremen. de

schmidt-bremen. de

I want YOU … u to make this YOUR class u Assume responsibility for

I want YOU … u to make this YOUR class u Assume responsibility for your – and all our Learning Outcomes u Help me make the class better Economics

How do we learn ? … u Listening u Watching u Writing e s

How do we learn ? … u Listening u Watching u Writing e s a e l p S N G I S E M NA u Thinking u … interactive (team) work? -> after each class (incl. lunch break): - 3 most important things I learned today - (up to 3) questions Students are selcted at random at the beginning of the next class

Assessment:

Assessment:

Aulis group

Aulis group

please m a r ta-g • Fa NO s ce-S t a h W

please m a r ta-g • Fa NO s ce-S t a h W nap • A pp • fo od in l i a e b clas • ee-M u t u s o y , e b u t • I • (d rink s are ok) But NAME SIGNS please

(10) Principles of Economics

(10) Principles of Economics

Every field of study has its own terminology Mathematics axioms integrals vector spaces Psychology

Every field of study has its own terminology Mathematics axioms integrals vector spaces Psychology ego id torts Law Promissory estoppel venues cognitive dissonance

Every field of study has its own terminology Economics Supply Opportunity cost Comparative advantage

Every field of study has its own terminology Economics Supply Opportunity cost Comparative advantage Elasticity Consumer Surplus Demand Deadweight loss

Economics trains you to. . u. Think in terms of alternatives. u. Evaluate the

Economics trains you to. . u. Think in terms of alternatives. u. Evaluate the cost of individual and social choices. u. Examine and understand how certain events and issues are related.

The Economist as a Scientist The economic way of thinking. . . u. Involves

The Economist as a Scientist The economic way of thinking. . . u. Involves thinking analytically and objectively. u. Makes use of the scientific method.

The Scientific Method u. Uses abstract models to help explain how a complex, real

The Scientific Method u. Uses abstract models to help explain how a complex, real world operates. u. Develops theories, collects, and analyzes data to prove (or dismiss) theories. Observation, Theory and More Observation!

Ten Principles of Economics Chapter 1 Copyright © 2001 by Harcourt, Inc. All rights

Ten Principles of Economics Chapter 1 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department, Harcourt College Publishers, 6277 Sea Harbor Drive, Orlando, Florida 32887 -6777.

A household an economy face many decisions: u. Who will work? u. What goods

A household an economy face many decisions: u. Who will work? u. What goods and how many of them should be produced? u. What resources should be used in production? u. At what price should the goods be sold?

Society and Scarce Resources: The management of society’s resources is important because resources are

Society and Scarce Resources: The management of society’s resources is important because resources are scarce.

Scarcity. . . means that society has limited resources and therefore cannot produce all

Scarcity. . . means that society has limited resources and therefore cannot produce all the goods and services people wish to have.

Economics is the study of how society manages its scarce resources.

Economics is the study of how society manages its scarce resources.

1. People face tradeoffs. “There is no such thing as a free lunch!”

1. People face tradeoffs. “There is no such thing as a free lunch!”

Economists study. . . u. I. How people make decisions. (principle 1 -4) u.

Economists study. . . u. I. How people make decisions. (principle 1 -4) u. II. How people interact with each other. (principle 5 -7) u. III. The forces and trends that affect the economy as a whole. (principle 8 -10)

Ten Principles of Economics I How People Make Decisions 1. 2. 3. 4. People

Ten Principles of Economics I How People Make Decisions 1. 2. 3. 4. People face tradeoffs. The cost of something is what you give up to get it. Rational people think at the margin. People respond to incentives. II How People Interact 5. 6. 7. Trade can make everyone better off. Markets are usually a good way to organize economic activity. Governments can sometimes improve market outcomes. III How the Economy as a Whole Works 8. The standard of living depends on a country’s production. 9. Prices rise when the government prints too much money. 10. Society faces a short-run tradeoff between inflation and unemployment.

Ten Principles of Economics I How People Make Decisions 1. People face tradeoffs. 2.

Ten Principles of Economics I How People Make Decisions 1. People face tradeoffs. 2. The cost of something is what you give up to get it. 3. Rational people think at the margin. 4. People respond to incentives.

Ten Principles of Economics II How People Interact 5. Trade can make everyone better

Ten Principles of Economics II How People Interact 5. Trade can make everyone better off. 6. Markets are usually a good way to organize economic activity. 7. Governments can sometimes improve economic outcomes.

Ten Principles of Economics III How the Economy as a Whole Works 8. The

Ten Principles of Economics III How the Economy as a Whole Works 8. The standard of living depends on a country’s production. 9. Prices rise when the government prints too much money. 10. Society faces a short-run tradeoff between inflation and unemployment.