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The Economic Way of Thinking
A university/college level course in economics
Understand the economic way of thinking
Progress to higher level study of economics
Understand concepts such as marginal benefits and costs, and how markets and government work
Critically analyse and create economic policy
Develop insights into key economic debates, including Austrian and Public Choice criticism of mainstream economics
Understand the moral and ethical component of economic decision making
Economics is about choices and trade-offs in a world of scarcity. This course will help you understand the economic way of thinking at a deep level, with an emphasis on human action and choice and with an ethical underpinning. The mainstream view will be challenged through the lens of Austrian and Public Choice economic theories.
An economic decision is any choice that involves perceived costs and benefits of any kind (not only of the financial kind) which may accrue to ourselves or to others. As such we are all economic actors and must make economic choices on a daily basis. As ethically aware people, we must examine our choices carefully, in line with our guiding values. As economists, we must examine the secondary and unintended consequences of any action, not just good intentions.
The course is suitable for students wanting to progress in economics, or for anybody who wants to understand the economic way of thinking, for use in private and professional life.
This series is produced especially for video, and consists of 12 sessions, each divided into between 4 to 8 modules. The course was developed for use in a first year, one semester principles of economics unit. The companion text book is Heyne, Boettke and Prychitko (2014) The Economic Way of Thinking 13e, published by Pearson Education. The text is not essential but is a useful resource.
Some recent student feedback:
“One of the best course I have enrolled in. The instructor is very knowledgeable and is exceptional in portraying a clear picture of the philosophy behind economic theory, that too in a clear and concise way. Money well spent.”
“This is such a great course! It’s intellectually stimulating and engaging. It includes multiple links to outside resources. Overall, it’s a great value if you are interested in acquiring a solid understanding of economics. Thank you!”
Session 2: Demand and Supply
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1
Module 1A: Choices and Trade-offsSession learning outcomes:
Understand the ethical and scientific basis of economics and how it fits with the insights from other fields of though; the concepts of costs, benefits, scarcity, trade-offs, marginal utility, wealth, specialisation, trade and comparative advantage
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2
Module 1B: The Science of Economics
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3
Module 1C: Specialisation and Trade
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4
Module 1D: Trade Creates Wealth
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5
Module 1E: Marginal Values
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6
Session 1 Homework Questions Part 1 -
7
Session 1 Homework Questions Part 2
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8
Session 1 Homework Questions Part 3
Session 3: Market Coordination and Intervention
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9
Module 2A: Trade-offs
Session learning outcomes:
Understand the important role of prices in communicating information in society and the concepts of demand, supply, elasticity, substitutes, opportunity costs, and changes in market data; be able to draw supply and demand graphs and interpret price and quantity data.
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10
Module 2B: The Demand Curve
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11
Module 2C: Changes in Demand
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12
Module 2D: Price Elasticity of Demand
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13
Module 2E: Producers' Costs
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14
Module 2F: The Supply Curve
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15
Session 2 Homework Questions Part 1
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16
Session 2 Homework Questions Part 2
Session 4: Entrepreneurs and Decision Making
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17
Module 3A: Finding Equilibrium
Session learning outcomes:
Understand the importance of market prices to communicate relative valuations; the socialist calculation problem in the absence of market prices; the consequences of interventions such as price fixing, and the concepts of equilibrium, surplus, shortage, minimum wages, and pricing in times of disaster
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18
Module 3B: Supply, Demand and Elasticity
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19
Module 3C: The Market Process
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20
Module 3D: Rejecting the Price System Entirely
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21
Module 3E: Intervention in the Price System
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22
Module 3F: Price Ceilings
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23
Module 3G: Price and Wage Floors
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24
Module 3H: Price Gouging and Prohibition
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25
Session 3 Homework Questions Part 1
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26
Session 3 Homework Questions Part 2
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27
Session 3 Homework Questions Part 3
Session 5: Competition and Government Policy
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28
Module 4A: Economic Calculation
Session learning outcomes:
Understand the key role that entrepreneurs play in forecasting demand in a world constrained by scarcity and uncertainty. Understand how price setting works, and the concepts of marginal benefits and costs, profits, residual claimants, market vs political entrepreneurship, and not-for-profit.
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29
Module 4B: What is Profit?
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30
Module 4C: Profit and Loss and the Entrepreneurial Process
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31
Module 4D: Price Setting
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32
Module 4E: Other Kinds of Entrepreneurs
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33
Session 4 Homework Questions Part 1
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34
Session 4 Homework Questions Part 2
Session 6: Externalities and Conflicting Rights
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35
Module 5A: Competition as a Process
Session learning outcomes:
Understand the importance of market competition as a process, and the tendency of competitors to want to control or avoid competition using the political means, and the consequences of such intervention; understand the concepts of cartels, game theory, monopoly privilege and natural monopoly.
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36
Module 5B: Protection from Competition
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37
Module 5C: Controlling Competition
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38
Module 5D: Enforcing Competition
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39
Module 5E: Monopoly
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40
Session 5 Homework Questions Part 1
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41
Session 5 Homework Questions Part 2
Session 7: Markets and Government
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42
Module 6A: Positive and Negative Externalities
Session learning outcomes:
Understand the concept of externalities as spill over benefits or costs not considered in decision making; the importance of empathy and tolerance, the tragedy of the commons and externalising of costs such as pollution, and the legal history of pollution. Understand the pros and cons of various methods to control negative externalities including privatisation, command and control, and taxation. Understand the effects of taxes on market outcomes including tax incidence.
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43
Module 6B: Private vs Common Property
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44
Module 6C: Policy Options - Private Negotiation
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45
Module 6D: Policy Options - Regulation and Taxation
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46
Module 6E: Taxes and Market Outcomes
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47
Session 6 Homework Questions Part 1
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48
Session 6 Homework Questions Part 2
Session 9: Macroeconomics and Measurement
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49
Module 7A: Welfare Economics
Session learning outcomes:
Understand the societal struggle between ‘freedom’ and ‘free stuff’ informed by different views of fairness; understand the concepts of producer surplus and consumer surplus, dead weight loss, the free rider problem, coercion, excludability and rivalry. Reflect on some examples of public vs private supply of various goods and services, and the incentives involved each way.
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50
Module 7B: Consumer and Producer Surplus
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51
Module 7C: Different Views of Fairness
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52
Module 7D: The Free Rider Problem
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53
Module 7E: Private vs Public Supply - Some Examples
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54
Module 7F: Private vs Public Supply - Some Examples (Continued)
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55
Session 7 Homework Questions Part 1
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56
Session 7 Homework Questions Part 2
Session 10: Long Term Growth
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57
Module 9A: Introducing Macro
Session learning outcomes:
Understand the delineation of macroeconomics, and its microeconomic foundations; understand the techniques used to collate macroeconomic statistics such as GDP, unemployment and CPI, and some of their shortcomings as measurement tools.
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58
Module 9B: Measuring a Nation's Income
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59
Module 9C: Measuring Unemployment
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60
Module 9D: Measuring Price Rises
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61
Session 9 Homework Questions Part 1
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62
Session 9 Homework Questions Part 2
Session 11: Money and Inflation
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63
Module 10A: Wealth and Poverty
Session learning outcomes:
Understand the drivers and inhibitors of long term growth and the increase in wealth over the last 200 years; factors of production including physical, human, natural and technological; the importance of saving and investment leading to capital accumulation and productivity; other policy enablers such as property rights, free trade, entrepreneurship and education, and the interaction of population growth.
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64
Module 10B: Growth Enabling Policies - Saving, Investment, Property Rights
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65
Module 10C: Growth Enabling Policies 2 - Foreign Investment, Entrepreneurship
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66
Module 10D: Growth Enabling Policies 3 - Free Trade
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67
Module 10E: Policies that Enable Growth (continued)
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68
Session 10 Homework Questions Part 1
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69
Session 10 Homework Questions Part 2
Session 12: Business Cycles
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70
Module 11A: What is Money?
Session learning outcomes:
Understand the functions of money and its evolution from commodity to fiat; the banking process and monetary expansion possible under fraction reserve banking; the phenomenon of the bank run and the role of central banks; the process of inflation and its consequences
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71
Module 11B: Money Creation
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72
Module 11C: Fractional Reserves
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73
Module 11D: Central Banking
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74
Module 11E: Inflation
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75
Session 11 Homework Questions Part 1
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76
Session 11 Homework Questions Part 2
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77
Session 11 Homework Questions Part 3
Session 13: Monetary and Fiscal Policy
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78
Module 12A: Explaining Short Run Fluctuations
Session learning outcomes:
Understand the phenomenon of the boom bust cycle and some competing theories to explain it, such as Keynesian and Austrian theory, and their divergent policy prescriptions; reflect on some historical responses to depressions such as the 1930s great depression and the 2008 GFC; the insights of Say’s law.
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79
Module 12B: Austrian Time Value Preference Theory
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80
Module 12C: Keynesian Theory
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81
Module 12D: Keynesian Theory (continued)
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82
Module 12E: The Great Depression
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83
Module 12F: Say's Law
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84
Session 12-13 Homework Questions Part 1
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85
Session 12-13 Homework Questions Part 2
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