Chapter1 - Chapter 1 Thinking Like an Economist...

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Chapter 1 – Thinking Like  an Economist
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Introduction What is the Optimal Class Size? To maximize learning without consideration of cost? How would considering costs change our answer? A personal tutorial course in economics might cost $40,000 A class of 300 students might cost $200/student
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Introduction What is the Optimal Class Size? What trade-offs must university administrators and students consider when choosing class size?
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Economics:  Studying Choice In a  World of  Scarcity The Scarcity Principle Boundless wants cannot be satisfied with limited resources. Therefore, having more of one thing usually means having less of another. Because of scarcity we must make choices.
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Wants vs. Resources Scarcity Choices Economics:  Studying Choice In a  World of  Scarcity
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Economics The study of how people make choices under conditions of scarcity and of the results of those choices for society. Economics:  Studying Choice In a  World of  Scarcity
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The Cost-Benefit Principle An individual (or a firm or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs Economics:  Studying Choice In a  World of  Scarcity
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Choosing the Optimal Class Size Revisited Assumptions: Two class sizes: 100 and 20 Introductory economics classes currently have 100 students Question Should the class size be reduced to 20 students? Economics:  Studying Choice In a  World of  Scarcity
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Observations The “best” class from an economic point of view will generally not be the same as the “best” size from the point of view of an educational psychologist. People will feel differently about the value of smaller classes. Economics:  Studying Choice In a  World of  Scarcity
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Application What other examples of scarcity and trade-offs can we identify? Economics:  Studying Choice In a 
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This note was uploaded on 06/30/2009 for the course ECON 201 taught by Professor Smith during the Spring '09 term at Allen County Comm College.

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Chapter1 - Chapter 1 Thinking Like an Economist...

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