Total Video Time: 81 minutes
(This module is not password protected, so you can get an idea of the format of each module.)
This is the first course module for Principles of Macroeconomics Online. I like to begin each module by giving a short introduction of what you’re going to be learning and how it ties into the course as a whole. If you can figure out how each module fits into the overall course, and understand how those connections work, you’ll have an easier time with the material.
This module sets the stage for what we’re going to be doing in this course. We start by understanding that economics is a study of human behavior and it’s not always easy to answer some important questions we may have like: what’s the fastest way to get out of a recession? How do we decrease unemployment? What can government do to increase technological development and advancement? We’ll look a bit at economic models: our simplified versions of markets or economies that help us understand what is going on. We’ll talk about the difference between positive economics (what is) and normative economics (what should be). We’ll address a few common mistakes that students often make when learning economics for the first time — especially students that have difficulty graphing. Finally, we’ll look at five major economic principles that we’ll see repeatedly throughout this course. It’s important to remember these principles as we get into the material — most of what we are doing is using models to prove how these principles hold, or to develop sub-themes on these principles.
This format for these modules is a combination of text, videos, and links to online sources.
After each introduction, you’ll have a link to the Performance Objectives for this module. If I forget to link these here, you can also find them in the Content area of D2L. I recommend that you download each of these and keep them handy as you’re learning the material. This list is essentially a list of things you need to be able to do (either on homework assignments, quizzes, or exams) to do well in the class. (Note: not every Performance Objective is discussed in these videos — some of them are handled quite well in your textbook, so you need to be reading your textbook too!) You can view this as a checklist and work on things you have difficulty doing. This also makes my job of helping you easier — instead of saying “I don’t understand this concept” you can be more specific and tell me exactly which Performance Objectives you cannot do, so that we can work towards fixing the problem.
Note: I had been playing these videos back and didn’t notice any problems until after I finished the 6th one, when I let it play out near the end. I realized that the longer the video plays out, the more the audio and video are not in synch — the audio plays a bit before the video portion, and by the end of 10 minutes it’s a few seconds apart. Once I realized that, I fixed my settings in the screen capture software and this does not happen in any more videos. I apologize if it makes some of these initial videos a bit harder to watch at the end. But I’ve spent too much time on these videos to spend even more time rerecording them just to try to make them perfect. I’m a perfectionist and I told myself at the beginning of this project that I would not rerecord videos multiple times just to try to make them perfect. My lectures in class aren’t perfect either, so just consider this one more attempt at recreating the in-class lecture experience.
Video 1.1: What is Economics? (15 min)
Video 1.2: Economics as a Social Science (12 min)
If you want to look more closely at the gas price temperature map, you can go here and click on the Gas Price Maps link in the center of the top bar.
Video 1.3a: Economic Models, part 1 (6 min)
This video explains how economists go about answering questions by using an economic model. Much of the different economic concepts we will discuss in this course can be shown with simple economic models; in more advanced economics courses, we make our models more realistic and, as a result, more complicated.
In the middle of that video, for some unknown reason my tablet pen stopped working so I had to cut the video short. The next video picks up right where this one left off.
Video 1.3b: Economic Models, part 2 (7 min)
Video 1.4: Correlation vs. Causation (10 min)
This video explains the difference between correlation between variables (which can happen for a variety of reasons), and causation between variables.
Video 1.5: Positive vs. Normative Economics (8 min)
This video explains a crucial distinction: positive economics and normative economics. Positive economics concerns the facts — what is the effect on the market of a particular event or government policy? Normative economics involves making a judgment based on those facts.
Video 1.6: Common Mistakes (8 min)
This video details some common mistakes students make in this course, so that you will hopefully not make them.
Video 1.7: Five Major Economics Principles (15 min)
This video gives a preview of the major principles that we’ll examine in much more detail throughout the semester. You may even want to come back to this video later in the semester, so that you don’t lose sight of the big picture while bogged down in more detailed analysis.
A detailed course outline of chapters week-by-week is available in your syllabus, but I wanted to give you a broader idea of what we’ll be doing this semester. The course is broken up in to three main parts. The first part of the course covers the basics: scarcity, markets, and supply and demand, and an introduction to macroeconomics that mostly focuses on long-run growth. In the second part of the course, we first look at defining and measuring the main macroeconomic variables with which we are concerned: output, inflation and unemployment; then we spend time developing the short-run model of the economy. In the third part of the course, we focus on economic policies; here we’ll talk about banks, money and monetary policy, as well as the government’s use of taxes and spending to influence the economy (fiscal policy). We finish up talking about international trade and finance and how that affects our economy and our government’s ability to use policies to stabilize the economy.
1. Consider the following statement: “The problem with economics is that it assumes people and firms always make the correct decision. The recent financial collapse shows that people make mistakes and bad decisions, so economics is useless.” Is this statement correct? Why or why not? Comment on what exactly economists assume about human behavior and what we can and cannot predict.
2. One of the resources that is scarce for you is time: you only have 24 hours in a day. Before we’ve done an economic analysis about how we think people should make decisions, I want you to reflect on how it is that you currently decide how to allocate (distribute) your time in a given day among competing alternatives. How do you weigh the alternatives? What is the thing you enjoy doing most, and why don’t you spend all of your time doing it? (Keep the answers clean, people…)
3. In your own words, explain the difference between “fair” and “equal.” What is the difference between me assigning grades “fairly” in this class and assigning grades “evenly”?
Your answer these questions should be on D2L, not in the comments area of this blog. But if you have a question about anything in the videos or want clarification, feel free to add comments below.