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Thinking Like an Economist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Thinking Like an Economist ,[object Object],[object Object],[object Object],[object Object]

THE ECONOMIST AS A SCIENTIST ,[object Object],[object Object],[object Object]

The Scientific Method: Observation, Theory, and More Observation ,[object Object],[object Object]

The Role of Assumptions ,[object Object],[object Object],[object Object]

Economic Models ,[object Object],[object Object],[object Object],[object Object]

Our First Model: The Circular-Flow Diagram ,[object Object]

Figure 1 The Circular Flow Copyright © 2004 South-Western Spending Revenue Income = Flow of inputs and outputs = Flow of dollars Goods and services bought Goods and services sold Labor, land, and capital Factors of production Wages, rent, and profit FIRMS ,[object Object],goods and services ,[object Object],of production ,[object Object],goods and services ,[object Object],of production HOUSEHOLDS ,[object Object],[object Object],MARKETS FOR FACTORS OF PRODUCTION ,[object Object],[object Object],MARKETS FOR GOODS AND SERVICES

Our First Model: The Circular-Flow Diagram ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Our First Model: The Circular-Flow Diagram ,[object Object],[object Object],[object Object]

Our Second Model: The Production Possibilities Frontier ,[object Object]

Figure 2 The Production Possibilities Frontier Copyright©2003 Southwestern/Thomson Learning Quantity of Cars Produced 0 3,000 1,000 Quantity of Computers Produced Production possibilities frontier A B C 2,200 600 1,000 300 700 2,000 D

Our Second Model: The Production Possibilities Frontier ,[object Object],[object Object],[object Object],[object Object],[object Object]

Microeconomics and Macroeconomics ,[object Object],[object Object],[object Object],[object Object]

THE ECONOMIST AS POLICY ADVISOR ,[object Object],[object Object]

POSITIVE VERSUS NORMATIVE ANALYSIS ,[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],POSITIVE VERSUS NORMATIVE ANALYSIS ? ? ?

Economists in Washington ,[object Object],[object Object],[object Object],[object Object]

Economists in Washington ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

WHY ECONOMISTS DISAGREE ,[object Object],[object Object]

Summary ,[object Object],[object Object],[object Object]

Summary ,[object Object],[object Object]

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