Lecture 2 - Announcements 1.Lecture slides will be posted...

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Announcements 1.Lecture slides will be posted on Scholar (see “resources”) the afternoon or evening before class. 2.Read announcements on Scholar! 3.First HW on Aplia is due Monday at 11:45pm. 4. If you took ECON 2005 last semester and are repeating, I can get your Aplia account extended. E-mail me if you have not already. 5.Now: Ch 1-2 in the book. Next week: ch 4.
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Learning how to think like an Economist Here are some things to think about in your everyday life. 1. Don’t confuse association with causation People commonly think that if two things happen together, then one (usually the one that comes first) must cause the other. This is not always true. In other words, if Event A happens before Event B, it is not necessarily true that A caused B. B may have somehow caused A or both A and B may have been caused by something else.
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Learning how to think like an Economist 2. Don’t make the “Fallacy of Composition” fallacy of composition: People often make the mistake of thinking that what is true or best for one person is necessarily true for all. Example: stealing internet from your neighbor. Good if you do it but what if everyone did it? No internet.
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Learning how to think like an Economist 3. Don’t ignore secondary effects Ignoring secondary effects: Often people do not think about or do not anticipate unintended consequences of their decision or action. Example: Child-proof aspirin bottles actually caused more children to get access to drugs since the adults just left the caps off because they were too hard to open.
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Article Alert! Good examples of “unintended consequences” (“ignoring secondary effects”?) in NY Times article I put under “course documents” on Scholar By the authors of “Freakonomics” – a book worth checking out.
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Learning how to think like an Economist 4. Be aware of “self selection” Self selection: Often you will hear a statistic that sounds really impressive. But because of “self selection”, the reality may not be as impressive. Self selection is when people choose to be in the group being studied. Because of this, the stats are based on these people and not on those who did not choose to be in the group. Just think about who the stats apply to.
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Self selection Example: “People who switched to Auto Insurance company X saved, on average, $200 per year.” Well duh, if they weren’t going to save, they wouldn’t have switched. What about all the people who didn’t switch?
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This note was uploaded on 10/11/2011 for the course ECON 2005 taught by Professor Zirkle during the Spring '07 term at Virginia Tech.

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Lecture 2 - Announcements 1.Lecture slides will be posted...

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