Lecture_01_Introduction+to+Economics_v1

Acknowledgement of Traditional Owners

• QUT acknowledges the Turrbal and Yugara as the First Nations owners of the lands where QUT is situated.

• Respect is paid to their Elders, lores, customs, and creation spirits.

• Recognition of the historical significance of these lands as places of teaching, research, and learning.

• Emphasis on the role of Aboriginal and Torres Strait Islander people within the QUT community.

Lecture Overview

Lecture 1

• Introduction to Economics

• Learning the economic way of thinking.

Traffic Congestion as an Economic Problem

• Suggested solutions for traffic congestion include:

  • Taxing road users via tollbooth

  • Adding more lanes

  • Increasing petrol prices

  • Improving public transport

  • Introducing carpooling

  • Lowering the price of public transport.

• Engagement platform: app.gosoapbox.com (Event Code: 218-199-383).

Objectives of the Lecture

• Understand the definition of economics.

• Learn the economic way of thinking.

• Align economic analysis with the UN Sustainable Development Goals.

Outline of Lecture

• What is Economics?

• Scarcity: The Economic Problem.

• The Economic Way of Thinking.

• Economics as a Social Science.

Understanding Economics

What is Economics?

• Origin of the term:

  • "Eco" (home) + "nomos" (accounts).

• Economics is a social science concerned with choices made by individuals, businesses, governments, and societies in relation to scarcity.

Scarcity: The Economic Problem

• Defined as the condition where wants exceed the ability of resources to satisfy them.

• Scarcity forces choices among available alternatives.

  • Example: Choosing between attending a lecture or watching a movie.

  • Firms must decide between producing various goods (e.g., toilet paper vs. face masks).

Fundamental Economic Questions

1. What to Produce?

   • Decisions on what goods/services to offer based on available resources.

2. How to Produce?

   • Choice of production techniques and factors of production involved.

3. For Whom to Produce?

   • Determining who receives goods/services, influenced by income distribution.

Factors of Production

Categories

• Land: Natural resources used in production.

• Labour: Human effort used in production.

• Capital: Tools and equipment used in production.

• Entrepreneurship: The organization of resources to produce goods/services.

Scarcity Examples

• Example of hilsa fish scarcity impacting India, Bangladesh, and Myanmar relations.

• Current solutions:

  • Fishing bans during breeding periods.

  • Creation of fishing sanctuaries.

Opportunity Cost

• Illustrated through cartoons, showing the concept of opportunity cost in decision-making.

Economic Way of Thinking

• Understanding the concept of choice as a tradeoff;

• Rational choice is informed by cost-benefit analysis:

  • Benefit: What is gained.

  • Cost: What is given up.

Key Ideas of Economic Thinking

• Rational decision making involves considering marginal costs and marginal benefits.

• Choices respond to incentives, influencing individual and firm decisions.

Application of Marginal Thinking

• Example of a farmer's decision on fertilising farmland as a cost-benefit consideration.

Economic Models

• Definition: Economic models describe variables and relationships in the economy, focusing on necessary features for explanations.

• Ceteris Paribus: Understanding how a change in one variable affects outcomes while other conditions remain constant.

Cause and Effect

• Caution against assuming causality in observed events; relationships may not always indicate direct cause.

Economics as a Social Science

• Economists aim to understand the mechanisms of the economic world.

• Distinction between positive and normative statements:

  • Positive: What is (e.g., environmental concerns related to coal).

  • Normative: What ought to be (e.g., recommendations for reducing coal usage).

Two Branches of Economics

• Microeconomics: Focuses on individual and business choices and their interactions with government policies.

• Macroeconomics: Studies aggregate effects on national and global economies based on individual and business decisions.

Outline of Lectures 2 – 12

1. Microeconomics

   • Demand & Supply

   • Elasticities

   • Market Efficiency and Government Intervention

   • Production and Cost

   • Perfect Competition and Monopoly

   • Monopolistic Competition and Oligopoly

2. Macroeconomics

   • GDP and Economic Growth

   • Unemployment and Inflation

   • Aggregate Demand/Supply and Expenditures

   • Fiscal and Monetary Policy

   • International Trade Policy

Review of Today’s Lecture

• Key points covered include:

  • Definition of Economics

  • Understanding Scarcity and its implications

  • The Economic Way of Thinking

  • Economics as a Social Science.