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What is the Point of Economics

Define economics:

What I learned: study of the allocation of scarce resources

What you said: Economics is about incentives

Merriam-Webster: a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services

Econlib: Economics is about making choices.

Hazlitt: [Economics] is a science of recognizing inevitable implications. We may illustrate this by an elementary equation in algebra. Suppose we say that if x = 5 then x + y = 12. The “solution” to this equation is that y equals 7; but this is so precisely because the equation tells us in effect that y equals 7.... The answer already lies in the statement of the problem. It must, it is true, be “worked out.” ... Yet his answer was already contained in the formulation of the problem. ... All this is equally true of economics. (https://mises.org/wire/lesson-revisited)

Labor

Capital

Human Capital

Natural Resources

Entrepreneurial Ability

Labor, Capital, Human Capital, Natural Resources, and Entrepreneurial Ability

In 1930, John Maynard Keynes wrote "The Economic Possibilities of our Grandchildren" (summarized) where he predicted that automation and capital growth would lead to us (or you) having about a 15-hour workweek.

Pareto Optimality

An allocation is Pareto efficient if there is no other allocation in which some other individual is better off and no individual is worse off. Also seen as the situation where any Walrasian general equilibrium allocation is Pareto-efficient outcome.

Notice, how difficult it is to imagine that any redistribution would make both parties better off. Is this an explanation of the world that appears to a certain group?

Is this a set of value judgments, interpreted as a mathematical model?

https://www.ssc.wisc.edu/~dquint/econ698/lecture%201.pdf,

https://www.economics.utoronto.ca/osborne/2x3/tutorial/PE.HTM

The Economic Problem

What is Keynes referring to when he talks about solving the "Economic Problem"? Is this something we have already done?

Great Abundance and Variety

Markets have achieved great strides. How are they best serving us?

How have markets failed us?

Inequality as a Global Problem

Increasing prevalence of people discussing inequality as the number one issue globally

What is the nature of your future employment?

Economism

Are we overvaluing economics through overestimating the importance of material conditions, focusing exclusively on economic metrics, applying economic methodologies when they are inappropriate, or accepting economic theory too readily.

Kwak uses the word as the "belief that a few isolated Economics 101 lessons accurately describes the real world."

Created By
Andre Neveu
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Credits:

Created with images by skeeze - "workers construction site" • Nathan Dumlao - "untitled image" • Andrew Neel - "untitled image" • Zbynek Burival - "untitled image" • Tim Gouw - "untitled image" • Jon Tyson - "untitled image" • Victoria_Borodinova - "family shopping center purchase" • ccipeggy - "grocery store market supermarket" • Kelly Robinson - "untitled image" • Austin Distel - "untitled image"

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