THE ECONOMIC WAY OF THINKING

1. THE ECONOMIC WAY OF THINKING

2. According to John Maynard Keynes The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions.

3. The Economic Way of Thinking Everything has a cost. People choose for good reasons. Incentives matter. People create economic systems to influence choices and incentives. People gain from voluntary trade. Economic thinking is marginal thinking. The price of a good or service is affected by people�s choices. Economic actions create secondary effects. The test of a theory is its ability to predict.

4. A Test Of Economic Reasoning The best things in life are free?

5. True or False???? Anything worth doing is worth doing right.

6. A Tough One�. Life is priceless

7. A Fair Trade? The purpose of economic activity is to improve the well-being of some people at the expense of others.

8. Mystery and Intrigue? Economic theory is not very useful because human behavior is not predictable.

9. The Decision Tree For grades 1-3 Students limit discussion to two choices Introduces good (benefits) and bad (cost) alternatives Clearly identifies opportunity cost

10. The Decision Tree model Your parents have given you a choice for your birthday party. You and your friends can either rent videos and games and stay home with pizza or you can go to a paint ball place.

11. The Decision Tree

15. The Problem

18. The Handy Dandy Guide People choose. All choices involve cost. People respond to incentives in predictable ways. Economic systems influence individual choices and incentives. Voluntary trade creates wealth. The consequences of choices lie in the future.