WELCOME TO ECON 1110 PRINCIPLES OF MACRO Dr

WELCOME TO ECON 1110 PRINCIPLES OF MACRO Dr. Young Se Kim 6: 30 – 9: 20

SYLLABUS F Instructor: Young Se Kim F Office: Etech 220 H Ph. # 565 -2220 F Office Hrs. : 1: 00 – 3: 00 TW and by appointment F email: kim 1@unt. edu F web site: www. cas. unt. edu/~kim 1

EXAM DATES F Exam 1 - February 20 th F Exam 2 - April 3 rd F Exam 3 - May 1 st F COMPREHENSIVE FINAL EXAM SATURDAY, May 6 th at 2: 00 pm

GRADING POLICY F 3 hourly exams (150 pts. each) F Final Exam (comprehensive) F Homework Assignments F Newspaper Assign. and Quizzes F TOTAL possible 450 pts 300 pts 150 pts 1000 pts

GRADING SCALE FA = 1000 - 900 pts F B = 899 - 800 pts F C = 799 - 700 pts F D = 699 - 600 pts F F = 599 pts or below

Newspaper Assign. and Quizzes F Short writing assignments based on current economic condition (30 pts) F Detailed instructions will be distributed F 8 “unannounced” quizzes (70 pts) F Workbook and a number 2 pencil with you F No make-up quizzes

TEXTBOOK AND MATERIALS F Roger A. Arnold Macroeconomics UNT 7 th edition F Principles of Macroeconomics Workbook 2006 edition F A Non-Programmable Calculator F Number 2 Pencils

HOMEWORK Homework assignments will be made on a weekly basis. F Assignments will come from the workbook and should be turned in on scantrons F I will supply the scantrons F Your name should appear on all scantrons Last name, First name F An assignment sheet with all homework for the semester is on the web F

TUTORING CENTER F Principles Tutoring Lab – Etech 266 F The lab is open from 8: 30 – 6: 30 Mon. & Wed. , 8: 30 – 5: 00 Tues&Thurs. , and 8: 30 – 1: 00 on Friday F Practice exams are available at www. econ. unt. edu

Principles of Macro ECON 1110 Spring 2006 Chapter 1 What Economics Is About

IMPORTANCE OF ECONOMICS F Good Citizenship in a Democratic Society F Improved personal decision making F Aids business decision making

MICRO vs. MACRO F MICROECONOMICS - the branch of economics that deals with the behavior and choices of an individual, firm, single industry, or market. F MACROECONOMICS - the branch of economics that deals with the aggregate behavior of the entire economy.

MICRO vs. MACRO (Example) F Macroeconomics does not try to answer the question of a) why do some countries experience rapid growth b) what is the rate of return on education c) why do some countries have high rates of inflation d) what causes recessions

MICRO vs. MACRO (cont. ) F Determinants of inflation F Relative market shares of GM and Ford F Amount of imports and exports between U. S. and Japan F Growth of total production in U. S. F Level of output a firm produces

Important Macro Concepts F Economic Growth F Unemployment F Inflation F Economic fluctuations F Productivity F Government Spending and Taxation F Monetary Policy

SCARCITY AND CHOICE F Unlimited Wants and Limited Resources Leads to SCARCITY F Scarcity Necessitates Choices F ECONOMICS is the study of CHOICES

Definition of Economics the study of how individuals and society CHOOSE F to employ SCARCE RESOURCES to produce goods and services F and to DISTRIBUTE them among the members of society

4 CATEGORIES OF RESOURCES F LAND - natural resources F LABOR - physical and mental talents people contribute to the production process F CAPITAL - improvements to land such as buildings, machinery and tools F ENTREPRENEURSHIP - the talents that some people for organizing land, labor, and capital into new business opportunities.

THINKING LIKE AN ECONOMIST F Scarcity and its effect - Need for a rationing device: dollar price - Competition F Opportunity cost: What one has to give up in foregone alternative when any action is taking Ex) What is the opportunity cost to you of attending college? What was your opportunity cost of coming to class today?

Opportunity Cost (Example) F Compact Disc (CD): $10 each F Cassette Tape (CT): $5 each - Opportunity cost of one CD? - Opportunity cost of five CDs? - Opportunity cost of one CT? - Opportunity cost of four CTs?

THINKING LIKE AN ECONOMIST F Costs and benefits of decisions Decisions 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? F Decisions at the margin - Marginal changes are small, incremental adjustments to an existing plan of action - Marginal Benefit (MB) vs. Marginal Cost (MC)

SCIENTIFIC THINKING F The Association-Causation Issue (Fallacy of False Cause) - Association: if two events are linked or connected in some way ex) wash your car at 10: 00 starts to rain at 10: 30

SCIENTIFIC THINKING F Fallacy of Composition: The erroneous view that what is good or true for the individual is necessarily good or true for the group ex) tariffs F Ceteris Paribus Assumption: All other things held constant or nothing else changes

ECONOMIC CATEGORIES According to the type of questions economists ask F POSITIVE ECONOMICS - the study of “what is” in economic matters. F NORMATIVE ECONOMICS - the study of “what should be” in economic matters.

IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE F The Stadium should be packed for Saturday’s UNT-UT Game. F The unemployment rate in Dallas is 5. 3%. F A country as big as the United States should have a job for anyone that is willing to work.

IDENTIFY THE FOLLOWING STATEMENTS AS POSITIVE OR NORMATIVE (cont. ) F The federal budget deficit has decreased every year for the last 20 years. F The unemployment rate is too high. F The costs of medical care increasing faster than the income of American citizens. F Lower income tax will generate greater income tax revenue for the government.

Assignment F Get your Text and Workbook F Read Chapters 1 - 3 F Assignment 1: pp. 11 -12 & 17 -18

ANY QUESTIONS?