Download - Welcome to Econ 1, Winter 2009
Welcome to Econ 1, Winter 2009
Instructor: John HartmanTeaching Assistant: Rosemarie Lavaty
First issue: Crashers
90 students max, due to the nature of this class No additional room in this class Interactive parts to the class
Class size should be 50-80 students for these interactive components
First issue: Crashers Crash list
Must be sophomore status or up To be eligible to add this class, you must do
all of the following this week Show up to each lecture Show up to any section you are able to add Provide proof of sophomore status or higher to me
Failure to do any of the above will make you ineligible to add this class
I may not be able to add all “eligible” crashers
First issue: Crashers
No add codes distributed until next week Last year, only 6 students added
Enrolled students get priority for seating
Other options for Econ 1
Prof. Crouch is teaching another lecture of Econ 1 this quarter
Prof. Sonstelie is scheduled to teach Econ 1 in the spring, with 420 spaces available
Econ 1, and 2 are scheduled to be taught in the summer
Second issue: Note taking
My suggestion is for you to write notes minimally Lecture slides will be available on
class website
Third issue: How this class will work Remember that this is a small class
Ask questions if things are not clear The syllabus is posted online See
http://econ.ucsb.edu/~hartman/ Attendance is an important part of this
class, both directly and indirectly If reading this size font is difficult, I urge you to sit near the front
Who is this?
Who is this? Ben Bernanke
Chair of the Board of Governors of the Federal Reserve System
Co-author of your Econ 1 textbook
Textbook for this class
Frank/Bernanke (“F/B”) Principles of Microeconomics Brief Edition
“Brief” saves you $$$ Good substitutes: 2nd, 3rd, or 4th
edition, or Principles of Economics by F/B
Published by McGraw-Hill/Irwin
Optional study guide
Expected to be available in mid-January
Check regularly with bookstore for more information
Office hours and review sessions
Office: NH 2028 Office hours
Mondays 12:30-1:30 pm Wednesdays 2:15-3:15 pm
No formal review sessions Some time will be spent in lectures
and sections
Some important dates Three tests, scheduled for:
Monday, Feb. 9 (in lecture) Monday, March 2 (in lecture) Tues., March 17 (final, 8:45-10:45 am,
room(s) to be announced) Test dates will likely not change Check syllabus for information on
allowable calculators
Grading
If you do not miss a test: Two best tests count 40% each Lowest test counts 20% Exception: If your best test is the
final, the final will count 60% and the other two tests count 20% each
If you do miss a test, check the syllabus for details
Grading
Since this is a small class, there is no pre-set curve
However, the top students will be guaranteed the highest grades (see syllabus for more details)
Extra credit We will do various activities
throughout the quarter, many interactive Attendance and performance in these
activities will give you extra credit You will also get extra credit (one
time) for class participation in lecture (excluding today) Asking an intelligent question Participating in an activity that includes a
subset of the class
Extra credit
The student with the most extra credit points at the end of the quarter will receive a 5 percentage point boost to grade Others will receive less than 5
percentage points, formula to be determined at the end of the quarter
Today: An introduction to economics
What is economics? Money? Finance?
Today: An introduction to economics
What is economics? Money? Finance? Part of the study of economics
involves money and finance As we will see over the next 10
weeks, economics covers many topics
An introduction to economics
What is economics? Frank and Bernanke (FB) define
economics as “the study of how people make choices under conditions of scarcity and of the results of those choices for society” (p. 4) Key word to remember: “choice”
Why do we make the choices that we do? 7 core principles of economics
Scarcity Cost-benefit analysis Incentives matter Comparative advantage Increasing opportunity cost Equilibrium Efficiency
Scarcity Nobody has everything that he/she
wants To get more of something good,
something else must be given up Most people seem to have most things
that are “highly valued” Good thing We will establish what “highly valued”
means
Cost-benefit analysis
Cost-benefit analysis: Think marginal
Criterion for doing something Marginal benefit should be at least as
great as marginal cost
Incentives matter
Cost-benefit analysis is important in predicting individual behavior Microeconomics focuses on individual
behavior For macroeconomics topics: Wait until
Econ 2
Comparative advantage
In simple economies: Everyone does best with specialization and trade
In more complex economies: ON AVERAGE, everyone does best with specialization and trade Example: When trade opens up, one
person may have to change jobs and earn less; 100K people pay $1 less on the good
Increasing opportunity cost
Use resources with the lowest opportunity cost first
As with cost-benefit analysis, remember to think in terms of marginal
Equilibrium
Two types for this class Market equilibrium Nash equilibrium (game theory)
No unexploited opportunities for individuals in either type of equilibrium
Efficiency
The more efficient an economy is, the more consumption can occur
If an economy improves efficiency, each person’s consumption can increase
Caution: Equilibrium and efficient sometimes are the same; sometimes they are not
Summary
Crashers: Keep showing up until I have more information
Three tests and extra credit determine your grade
7 core principles will be the focus of Econ 1
For Wednesday Read the syllabus:
http://econ.ucsb.edu/~hartman/ Buy the Frank/Bernanke text book If needed, buy a non-programmable four-
function or scientific calculator that is NOT a communication device
Read Chapter 1 Read appendix if you think that your graphing skills
are weak Try to think like an economist
In the future… If you must leave early, please sit near
an exit and leave quietly at least ten minutes before the end of lecture
Otherwise, please do not pack your belongings until I am finished with the lecture
Important announcements may be missed if too many people are making noise
See you on Wednesday