EC120 Chapter Notes - Chapter 2: Root Mean Square, Saving, Opportunity Cost

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6 Sep 2016

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EC120 Full Course Notes

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Economists devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories. The dispassionate development and testing of theories about how the world works. An economist could use the scienti c method to prove that in ation occurs when a country prints too much money. Economists make assumptions because assumptions can simplify the complex world and make it easier to understand. To study international trade, assume that the world consists of two countries and each produces only two goods. Most assumptions are unrealistic, but simple to learn and provide useful insights. Economists use models, often composed of diagrams and equations, to learn about the world and study economic issues. Economic models omit many details (simplify reality) to allow us to see what is truly important. When developing theory, graphs provide a visual representation of the ideas. When analyzing data, graphs show a visual relationship between variables. Display information only on a single variable.

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Description
Thinking like an economist can be helpful in your daily life. If you understand basic economic principles such as incentives, opportunities, and risks and rewards, you can make better decisions. Learning to view the world as an economist can also help you make decisions about which credit card to apply for, what loan to take, or which health care plan is the best.

For this assignment, you will participate in a discussion about the two roles of economists in the context of a specific scenario. When responding to the discussion questions, be sure to reference course materials to support your conclusions and opinions. You should do the same whenever you respond to another personâs discussion post. By doing so, you not only make a stronger case, but better support your own learning.

Scenario
Imagine that a group of advisors to the president has suggested providing a tax cut for the middle class in order to stimulate the economy and reduce unemployment. The president has asked for your analysis of this proposed tax cut.

Instructions

In a post to the discussion, respond to the following:

Describe how an economic scientist would approach the tax cut recommended by the advisors in the scenario you just read. What are some economic factors that the economic scientist would consider when crafting his or her statement on the tax cut proposed?

Describe how an economic policy advisor would approach the same tax cut and provide the reasoning behind the position.

Remember to think like an economis, even if it goes against your own opinions about whether a tax cut is a good idea.

What economic principles does the tax cut involve?

What are some of the repercussions of the tax cut on the wealthy and do you think this is a positive or negative outcome? Why?

Do you think tax donations should be tax deductible even when it hurts government revenue?

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EC120 Chapter Notes - Chapter 2: Root Mean Square, Saving, Opportunity Cost

EC120 Full Course Notes

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