Chapter 1 the Nature and Method of Economics

Economics Chapter 1--The Nature and Method of Economics

Terms to Identify: Economics Economic Perspective Marginal Analysis Scientific Method Theoretical Economics Principles Generalizations Other-things-equal assumption Policy Economics Tradeoffs Macroeconomics Aggregate Microeconomics Positive Economics Normative Economics Fallacy of Composition “After This, therefore because of this,” fallacy

You should be able to: Write a formal definition of economics Describe the three key features of an economic perspective Give examples of the application of an economic perspective Give two good reasons for studying economics Identify the elements of the scientific method Describe theoretical economics Distinguish among hypotheses, theories, principles, laws, and models Explain what an economic principle is and how economic principles are obtained Discuss how economic principles are generalizations and abstractions Explain what the “other things equal” (ceteris paribus) assumption is and why this assumption is employed in economics Define policy economics List three steps in economic policymaking Identify eight economic goals widely accepted in the United States and many other nations Discuss the conflicting or complementary nature of economic goals Distinguish between macroeconomics microeconomics Give examples of positive and normative economics Identify the five pitfalls to objective thinking when given examples

Be able to do: Textbook Page 14 #1, 2, 4-10