Scarce resources, choices, and opportunity costs
The concept of opportunity cost is critical to understanding individual choice, because you always have to give up something in order to get another thing. In other words, the real cost of purchasing good A is equal to the value of the next best alternative (good B) that you give up in order to purchase good A. For example, what would you rather be doing instead of studying this course? The task that you have forgone in order to study economics is the opportunity cost of studying economics.
Getting to know economics
As you read the materials in this subunit, pay particular attention to what is meant by the “economic way of thinking.” You will want to get used to using this lens or mode of thinking as a way to understand the work that economists do and why economic principles are so widely applicable across a number of fields. This subunit also examines the key differences between microeconomics and macroeconomics and between normative economics and positive economics.
Review of data representation and mathematics for economics
Economics communicates information in a variety of formats: text, tables, graphs, mathematical expressions, and more. The following resources explain the form and function of a number of these formats, as well as their use within the context of economics.
Completing this section is optional. However, this course will expect you to have the following competencies, so be sure to review this subunit if you are not confident about your skill level:
- Read data from a table and transform it into a graph.
- Understand the coordinate plane (x, y) and its use for constructing graphs.
- Calculate the slope of a linear graph and be able to explain what the numeric value of a slope means and the significance of negative versus positive slopes.
- Understand the linear equation of a line, y=mx+b.
- Explain what an intercept is and how to determine it.
CK-12 Statistics: “Types of Data Representation”
- Please open and explore this collection of five resources on data representation. Devote time particularly to the “Graphic Displays of Data” resource, which contains a number of videos and example graphs. The “Analyzing Data” reading contains a very helpful chart listing the pros and cons of using each type of graph. Conclude by attempting the “Types of Data Representation Practice.”
Khan Academy’s “Graph from Slope-Intercept Equation”
- Watch this video, which provides a review of the basics of linear algebra you will need for this course, namely the ability to understand and graph straight lines, their slope, and their x- and y-intercepts. If you know this material well, don’t dwell. Continue working your way through Unit 1.
Scarce resources, choices, and opportunity costs
The concept of opportunity cost is critical to understanding individual choice, because you always have to give up something in order to get another thing. In other words, the real cost of purchasing good A is equal to the value of the next best alternative (good B) that you give up in order to purchase good A. For example, what would you rather be doing instead of studying this course? The task that you have forgone in order to study economics is the opportunity cost of studying economics.
Activities
OpenStax College: “Principles of Microeconomics, Section 1.1: What Economics Is and Why It’s Important”
Principles of Microeconomics: “Chapter 1, Section 1: Defining Economics”
OpenStax College: “Principles of Microeconomics, Section 2.1: How Individuals Make Choices Based on Their Budget Constraint”
“Economic Problem: Scarce Resources”
Khan Academy: “Opportunity Cost”
Khan Academy: “Increasing Opportunity Cost”
TED Talks: “Bjorn Lomborg Sets Global Priorities”
Getting to know economics
As you read the materials in this subunit, pay particular attention to what is meant by the “economic way of thinking.” You will want to get used to using this lens or mode of thinking as a way to understand the work that economists do and why economic principles are so widely applicable across a number of fields. This subunit also examines the key differences between microeconomics and macroeconomics and between normative economics and positive economics.
Activities
Principles of Microeconomics: “Chapter 1, Section 2: The Field of Economics”
Principles of Microeconomics: “Chapter 1, Sections 3: The Economists’ Tool Kit”
Review of data representation and mathematics for economics
Economics communicates information in a variety of formats: text, tables, graphs, mathematical expressions, and more. The following resources explain the form and function of a number of these formats, as well as their use within the context of economics.
Completing this section is optional. However, this course will expect you to have the following competencies, so be sure to review this subunit if you are not confident about your skill level:
Activities
CK-12 Statistics: “Types of Data Representation”
Khan Academy’s “Graph from Slope-Intercept Equation”
Developer