ECON 130 (Intro Micro) Week One

Hi everyone – welcome to what will become a (regular) Wednesday post, even thought today is Tuesday.

To the students reading this, welcome to VUW’s ECON 130. The purpose of these weekly posts is to outline some of the key questions we should be able to think through given what we have worked through in class. You can also comment on these posts with questions from class if you want it to be seen publicly (including by your lecturer and other economists from around New Zealand).

The goal here is to think about what we are doing and why – if it is a suggestion about how to teach the content better then I’m all ears, but it is probably better just to email me

Other areas where you can get information are:

• Blackboard: Here the lecture slides will be posted prior to the lecture, while the lecture videos will be available afterwards. There is also a forum here you can ask questions on which is accessible by other students.
• Email: You can contact me at [email protected] for questions that you would rather ask without an audience – and to organise meeting up for office hours.
• Facebook: Your class representative will likely set up a Facebook page (or some equivalent) so that students can ask questions about the course without the lecturer being able to see!
• For specific issues regarding assignments and sickness, contact the course administrator and the course coordinator as listed on blackboard. If you feel like you aren’t being listened to, the course representative is the person to talk to.

To non-students, hello! I am interested in giving students a chance to chat about economics and the ideas we have discussed in class – so that their voices can be heard, and they can gain some experience debating and discussing economic issues. This is the first year trialling this, so we’ll see how motivated people feel. I would appreciate any of you joining in – as most of the readers of this blog are trained New Zealand economists.

Week One questions

First off, lets link to Wednesday and Thursday‘s lectures.

In these lectures we define the general economic problem and our motivations for studying it. We are learning a language that allows us to systematically think about issues of allocation under scarcity – and also allows us to avoid being tricked by people who use that language to simply push what they want.

To do this we will build models. And Thursday has our first example of a model (the Production Possibility Frontier [PPF]) – lets link to our friends at Khan Academy if you want to go through that again.

Lets ask some questions about interpreting models and this PPF which will help us think about how we are using models throughout the course:

1. Is an economic model a perfect representation of reality? If not, why not?
2. If an economic model doesn’t perfectly represent reality how do we use it? Is it worthless or should we treat a solved model as truth?
3. What is the point of the models we explore in class – to give us a tool to describe trade-offs and highlight assumptions or as a water-tight case about what we should do?
4. If we are on the frontier of the PPF does this mean that we are in the best position normatively?
5. Should the goal of policy be to push the economy onto the PPF?
6. Should the goal of policy be to push the PPF itself further out?