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BUS 525 Week 1

This introductory economics course will cover microeconomics, which studies household and firm choices in markets, and macroeconomics, which studies the overall economy. Students will learn through lectures, homework, quizzes, a midterm exam, group project, and final exam. Economics asks basic questions like what and how goods are produced, how they are distributed, and the underlying assumptions of rational choice and incentive-based decisions. Graphs and quantitative tools will be used to analyze and understand economic relationships.

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Alif ul Huq Akash
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29 views15 pages

BUS 525 Week 1

This introductory economics course will cover microeconomics, which studies household and firm choices in markets, and macroeconomics, which studies the overall economy. Students will learn through lectures, homework, quizzes, a midterm exam, group project, and final exam. Economics asks basic questions like what and how goods are produced, how they are distributed, and the underlying assumptions of rational choice and incentive-based decisions. Graphs and quantitative tools will be used to analyze and understand economic relationships.

Uploaded by

Alif ul Huq Akash
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 15

§Why study economics?

§ What is the basic questions economics asks?


§Branches of economics: microeconomics and
macroeconomics.
§How are they related to the course?
§Introduction to graphs and other quantitative tools used
in the course

1
Introductory lecture: Week 1

Approach to the course:


— Attendance in Class Sessions (5%):
— 5 Homework(5%): These will consist primarily
of end-of-chapter and similar questions and
problems. ( 4 out of 5)
— 3 Quizzes (10%): Duration of 15 – 20 minutes.
These will include some combination of
essay/short answers, problems, and multiple-
choice questions. (2 out of 3).
2
Introductory lecture: Week 1

— Midterm Exam(30%): Duration of 75 – 90 minutes. It will


include some combination of essay/short answers,
problems, and multiple-choice questions.
— Group Project (15%): The tasks/activities will deal with
issues from the “real world” of investments, in the local and
global contexts. These activities will be carried out in
group (each of a minimum of 3 and maximum of 4
members) setting.
— Final Exam (35%): Duration of 105 –120 minutes. It will
include some combination of essay/short answers,
problems, and multiple-choice questions.
3
Introductory lecture: Week 1
§ Economics is the social science that studies the choices
that individuals, businesses, governments and entire
societies make as they cope with scarcity and the
incentives that influence and reconcile those choices.
§ Microeconomics is the study of how households and
firms make choices, how they interact in markets, and
how the government attempts to influence their choices.
§ Macroeconomics is the study of the economy as a
whole, including topic such as inflation,
unemployment, economic growth etc.

4
Introductory lecture: Week 1
§ What are the basic questions economics asks?
Underlying assumptions:
Ø People are rational( you try to maximize the benefits over cost)
Ø People respond to economic incentives( you work harder on a problem
set if it has greater likelihood to appear in your subsequent exam)
Ø Optimal decisions are made at the margin (marginal analysis).
Basic questions asked:
— What good and services will be produced? (Gun vs.
butter- introduce the concept of opportunity cost-
highest –valued alternative that must be given up to
engage in an activity. At the end of the day
individual consumers, firms and government make
these decisions)
— How will the good and services be produced- Land,
Labor, Capital, Entrepreneurship(firms decide-
labor incentive or capital incentive)?

5
Introductory lecture: Week 1
Who will receive the goods and services produced
(Land earns rent, labor earns income, capital earns
interest, Entrepreneur earns profit) depends on
income distribution!
Market economy: Individuals are free to buy land, capital
goods and services in markets.
Command economy: Government decides what, how
and for whom to produce.
Mixed Economy: Market capitalism with government
regulations.

6
Introductory lecture: Week 1
Understanding Graphs
— Scatter diagram
— Breaks in the Axes
— Misleading graph
— Correlation and causation
— Positive/direct relationship
— Negative/inverse relationship
— Linear relationship (y= a+ bx, Slope= ∆y/∆x )
— Ceteris paribus
— PPC

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