EC101sOutlines02WhatIsEconomics (1)

EC101sOutlines02WhatIsEconomics (1) - EC101 BB & EE /...

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EC101 BB & EE / Manove Introduction: Lecture 2 Economic Thinking, What is economics? Introduction>Lecture 2 p 1 EC101 BB & EE / Manove Announcements Please read announcements on the course website every Monday, Wednesday and Friday. http://people.bu.edu/manove/EC101/ Check your assignments on Aplia frequently. This Thursday only: EC101 EE Lecture moved to Law Auditorium. See course website. Make-up lecture (Monday at 5p) for observant Jews who cannot attend Thursday’s lecture ? Discussion sections start next week (Sept 13). Midterm Exam, Thursday, Sept 30. Introduction>Lecture 2>Announcements p 2
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EC101 BB & EE / Manove Thinking Like an Economist (Continued (Continued) Introduction>Thinking p 3 EC101 BB & EE / Manove 6. People respond to incentives— sometimes in unexpected ways. Example: Protecting the Elderly A town ordinance prohibits eviction of the elderly for nonpayment of rent. Introduction>Thinking>Incentives>Protecting Elderly p 4
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EC101 BB & EE / Manove Example: Protecting trees. Suppose the U.S. Congress passes a tough law that limits the use of paper law that limits the use of paper. What would happen to the number of trees? Introduction>Thinking>Incentives>Protecting Trees p 5 EC101 BB & EE / Manove Suppose Congress made it illegal to eat chicken or eggs What would Protecting Trees 2 eat chicken or eggs. What would happen to the number of chickens? Introduction>Thinking>Incentives>Protecting Trees>Chickens p 6
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EC101 BB & EE / Manove 7. Prices that reflect all costs provide the best incentives the best incentives. Example: Highway Tolls What is the economic function of highway tolls? Who is willing to pay high tolls? Who isn’t? Who is willing to pay high tolls? Who isn t? Introduction>Thinking>Prices>Highway Tolls p 7 EC101 BB & EE / Manove Example: Price of Gasoline What is the economic cost of using gasoline? The expense of extracting petroleum, shipping it, The expense of extracting petroleum, shipping it, refining it, etc. But that is only the beginning. Introduction>Thinking>Prices>Gasoline p 8
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EC101 BB & EE / Manove Price of Gasoline High gas prices would provide incentives to… How high should gas prices be? Introduction>Thinking>Prices>Gasoline p 9 EC101 BB & EE / Manove 8. Statistical findings are often misleading. Example: What should you conclude from the following statement? “In my experience, sex makes students unhappy —Psychiatrist Harvard Student Health Service unhappy.
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This note was uploaded on 12/11/2010 for the course ECON 101 taught by Professor Idson during the Fall '08 term at BU.

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EC101sOutlines02WhatIsEconomics (1) - EC101 BB & EE /...

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