February 2010 Archives

Here is a link to the gapminder.org site I showed in class.

Here's a video that I will show in class on Thursday.

Yes they can! from Gapminder Foundation on Vimeo.

Here is the video I showed today:

And if you're wondering what this video has to do with economic growth, think about this for a minute.  The point of the video is to highlight the way that the world is changing.  That change is the result of economic growth.  A country beginning its path to modern growth today will go through all the changes that the U.S. went through in the last hundred years--but they'll do it in a couple of decades.  That is the story I want you to take away from this.

And how will you adapt to this new world? Leaders in this new world will be those who can harness social networks and invent new technologies.  The more you understand economics, the more you will understand this changing world.  The economic way of thinking gives you tools that you can use that will work just as well in the next 50 years as they did in the last 50--tools to understand why things are the way they are, and tools to help change the world for the better.

Do economists care about Facebook?  Do we care about making copyright law reflect changing technologies?  You bet we do.  The world is changing.  It's a consequence of economic growth.  Few subjects could boast such a direct connection to the world's most interesting questions.

Bureau of Economic Analysis (GDP press releases and data)

Bureau of Labor Statistics (Employment, unemployment, productivity, and price data)

hw231_2.pdf

I am out of town with a student group.  I will answer any e-mails you may have with questions about the exam when I return in the evening (around 9:30).

It is more important to be able to apply the big ideas (chapter 1) than to be able to list them.  In other words, you should be able to look at a situation and see why the incentives matter, what the trade-offs are, and what the opportunity cost of an action is.  If you can do this (and the problems at the end of each chapter are good for testing yourself), then you should do well.  There are several questions where you will need to think about the incentives--even if that is not what is asked for directly.  Don't make the questions too hard!  Remember ceteris paribus (all other things being equal) and don't bring in all kinds of other assumptions.

Pay special attention to the things that shift demand and supply.

Demand shifters:

• Income
• Population (# of buyers)
• Price of substitutes and complements (know which is which!)
• Expectations
• Tastes (preferences)

The good's own price does not affect demand.  The good's own price affects the quantity demanded.

Supply shifters:

• Technological innovation
• Taxes and subsidies
• Expectations
• Entry and exit of producers (# of producers)
• Changes in opportunity cost (see homework problem on corn and soybeans)

The good's own price does not affect supply.  The good's own price affects the quantity supplied.

Know what happens to price and quantity when supply or demand shift.  (See figure 3.8 page 43 and be able to apply it.)

econ231_1.ppt