Lecture 2 - Announcements 1.Read announcements on Scholar!...

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Announcements 1.Read announcements on Scholar! 2.First HW on Aplia is due Monday at 11:45pm. 3. If you took ECON 2005 last semester and are repeating, I think I can get your Aplia account extended. E-mail me. 4.Now: Ch 1-2 in the book. Next week: ch 4. (skipping ch 3) 1 of 36
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Learning how to think like an Economist 2 of 36 Here are some things to think about in your everyday life. 1. The fallacy that association is 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 3 of 36 2. 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 4 of 36 3. The mistake of ignoring 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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Back to Choices and Scarcity As we said last time, economics is all about agents making decisions about what to do with scare resources. What are these resources and what can we do with them? Who are the main players in this game? How do they decide things?
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Resources Inputs; factors of production Used to produce goods and services Goods and services are scarce because resources are scarce 1. Labor 2. Capital 3. Natural resources (land) 4. Entrepreneurial ability
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Labor - human effort Physical effort Mental effort Time
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Lecture 2 - Announcements 1.Read announcements on Scholar!...

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