kf001 - 1 Ka-fu Wong University of Hong Kong Thinking Like...

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Unformatted text preview: 1 Ka-fu Wong University of Hong Kong Thinking Like An Economist 2 Id like to introduce you to Marty Thorndecker. Hes an economist but hes really very nice. 3 Hi, I am Marty. 4 Hi, I am Marty. 5 Can we express yourself? Suppose you had the chance to meet the Chief Executive in a cocktail party. You were asked to express your opinion on minimum wage legislation in Hong Kong. How do you express your views and convince him/her in five minutes? 6 Can you express yourself? Most students who take introductory economics leave the course without really having learned even the most important basic economic principles. Their ability to answer simple economic questions several months after leaving the course is not measurably different from that of people who never took a principles course. * * Hansen, W. L., M. K. Salemi, and J. J. Siegfried (2002) Use it or lose it: teaching economic literacy, American Economic Review (Papers and Proceedings), 92 (May): 463-72. 7 How do we learn a new language Start simple Repetition and drill Active learning How much is this? 8 Should there be 12 separate sections of Econ 101, with 25 students each? 9 Or should there be only one section, with 300 students? 10 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 Extreme case: a class of infinite students might cost less than $0.1/student What trade-offs must university administrators and students consider when choosing class size? 11 The Scarcity Principle (also called no-free-lunch 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. 12 Microeconomics The study of how people make choices under conditions of scarcity and of the results of those choices for society. 13 Rationality assumption People have goals and try to fulfill them as best as they can. 14 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 Should I do activity x?...
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kf001 - 1 Ka-fu Wong University of Hong Kong Thinking Like...

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