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5 Powers of Economic Thinking

5 Powers of Economic Thinking. Five Powers of Economic Thinking. 1. Resources cost more than you think. Accounting costs (Monetary) --$ cost. Opportunity cost (Non-monetary) --. The next highest-valued alternative. All decisions are rational. People

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5 Powers of Economic Thinking

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  1. 5 Powers of Economic Thinking

  2. Five Powers of Economic Thinking 1. Resources cost more than you think. Accounting costs (Monetary) --$ cost Opportunity cost (Non-monetary) -- The next highest-valued alternative. • All decisions are rational. People • make a decision after thinking through costs and benefits.

  3. Is this person’s decision rational? http://www.humoroftheday.com/gallery/images/Pierced1.jpg

  4. 3. All Decisions are Made at the Margin. Margin—the weighing of additional costs and additional benefits of a specific change in the current situation. http://www.new2usa.com/nova/english/00000226/penny.jpg

  5. http://seattlepi.nwsource.com/dayart/20010824/226Ground24Q.jpghttp://seattlepi.nwsource.com/dayart/20010824/226Ground24Q.jpg

  6. Who in here would NOT pick this $100 bill up if you saw it lying on the ground? Why would you pick it up? MB are at least = MC

  7. 4. The answer to most questions is found in this simple statement: IT DEPENDS!!

  8. 5. People are maximizers We all want more than less. We want everything! You have $35,000 in your pocket and you are going to purchase a car. You have narrowed your search to two choices: YUGO BMW

  9. Mini Project • On one half-sheet of colored paper place a photo, title and statement explaining one of your daily choices. • Your title should be one of the five powers of economic thinking. • Your statement should explain that concept in the context of one of your decisions. • Your picture should relate to your example.

  10. Famous Individuals Who Majored in Economics

  11. George H.W. Bush and George W. Bush http://coat.ncf.ca/our_magazine/links/53/bush_sr_jr.JPG

  12. Ronald Reagan http://www.brocktoon.net/img/ronald_reagan.jpg

  13. Gerald Ford http://img132.imageshack.us/img132/5518/fordsnapshot2sv.jpg

  14. http://upload.wikimedia.org/wikipedia/en/thumb/5/5c/O'Connor,_Sandra.jpg/200px-O'Connor,_Sandra.jpghttp://upload.wikimedia.org/wikipedia/en/thumb/5/5c/O'Connor,_Sandra.jpg/200px-O'Connor,_Sandra.jpg Sandra Day O’ Connor http://www.dallasnews.com/sharedcontent/dws/img/v3/07-02-2005.N1A_02OCONNORlede.GDN1KNVL2.1.jpg

  15. Arnold Schwarzenegger http://media.schwarzenegger.ca/arnold/Schwarzenegger.jpg http://www.petrukhine.ru/gallery/albums/schwarzenegger_arnold/schwarzenegger_arnold_009.jpg

  16. Sadie Tanner Mossell Alexander receiving Ph.D. at the University of Pennsylvania http://content.answers.com/main/content/wp/en/thumb/a/a6/180px-Mossell_02.jpg

  17. Cate Blanchett http://www.cate-blanchett.org/pictures/cate-blanchett-3.jpg

  18. Danny Glover http://www.pubdef.net/uploaded_images/danny-glover-791316.jpg

  19. Paul Newman http://www.my-wc.com/celebs/paul_newman/top.jpg

  20. http://www.bobgruen.com/files/rollingstones/files/R.203%20ROLLING%20STONES%20PARTY.jpghttp://www.bobgruen.com/files/rollingstones/files/R.203%20ROLLING%20STONES%20PARTY.jpg http://www.jeffpidgeon.com/uploaded_images/mick.jagger-759852.jpg http://www.sportsevents.net/events/images/rolling_stones.jpg Mick Jagger

  21. Janet L. Yellen took office as President and Chief Executive Officer of the Federal Reserve Bank of San Francisco on June 14, 2004 http://www.reformation.org/wash-fed-reserve-bank.jpg http://www.frbsf.org/federalreserve/people/officers/yellen.jpg

  22. Tiger Woods http://www.golftodaymagazine.com/0603/images/s2%20Tiger%20Woods,%20AP%20photo.jpg

  23. James Blake http://pub.tv2.no/multimedia/na/archive/00206/james_blake__us_ope_206390c.jpg

  24. Robert Edward Turner the III, Founder of CNN http://cache.gawker.com/news/ted.turner.jpg

  25. http://www.bloggingneworleans.com/media/2006/05/lionel-richie-coming-home.jpghttp://www.bloggingneworleans.com/media/2006/05/lionel-richie-coming-home.jpg

  26. Carlos Salinas de Gortari President of Mexico from 1988 to 1994 http://chronicle.uchicago.edu/041202/salinas.jpg

  27. Donald Trump http://www.hollandsentinel.com/images/100899/trump.jpg

  28. Alan Greenspan http://www.theage.com.au/ffximage/2004/10/17/alan_greenspan_narrowweb__200x234.jpg

  29. Important Terms in Economics

  30. Post Hoc Fallacy-- A false cause and effect relationship. A occurs before B; therefore, A is the cause of B. You load software onto you computer. The next day you turn on your computer and it doesn’t turn on. Without checking things out, you are sure it was the software that caused the problem. The picture on your old television goes out. You get up and smack the side of the TV. This fixes the TV. You are sure the next time your picture on your TV goes out, you can just smack the side and it will be fixed.

  31. Post Hoc Fallacy-- A false cause and effect relationship. A occurs before B; therefore, A is the cause of B. Superstitions are post hoc fallacies.

  32. Fallacy of Composition-- What is true of a part is true of the whole. "A car makes less pollution than a bus. Therefore, cars are less of a pollution problem than buses." "Atoms are colorless. Cats are made of atoms, so cats are colorless." “All businessmen are crooks.”

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