Week 1 - Laying the Foundation

Day 1 - Getting Started

Day 3 - Discovering Economic Principles in Everyday Life

The Power of Incentives
9. According to the authors of Common Sense Economics, the choices we make as voters and citizens can exert an enormous impact on our freedom and prosperity. In order for us to choose intelligently, we must understand what three basic principles of economics? ?
Human decision-making, the analysis of the forces underlying choice, and the Implications for how societies work.
10. What does the "economic way of thinking" involve?
The economic way of thinking includes the integration of certain key concepts into your thought process.
11. What phrase is used to reflect how incentives affect our choices in predictable ways?
"Incentives matter"
12. How do changes in market prices alter incentives in a manner that works to coordinate the actions of both buyers and sellers?
If the customers are demanding more of an item than the producers can or wants to produce, its price will rise. As the price increases, the sellers will be more likely to provide the item, while the customers will buy less. The higher price will bring the amount produced and the amount demanded to a balance.
14. True or False: Changes in incentives influence persons who are self-centered, but not those who are compassionate and altruistic, like Mother Teresa.
False
15. According to Dwight Lee, what are the two important functions of incentives?
First, to communicate information on the best things to do, and second, to motivate people to do them.
16. From where do the most important incentives come?
The most important incentives come from the subjective desires of individuals.
13. True or False: Incentives matter just as much under socialism as under capitalism.
True

The Power of Incentives by Dwight Lee

Day 4 - Discovering Economic Principles in Everyday Life

Scarcity and Opportunity Costs
17. What is the reality of life on our planet?
Productive resources are limited while the human desire for goods and services is virtually unlimited.
18. We are forced to choose among alternatives because we are constrained by the _________________ of resources.
Limited amount
19. What is the opportunity cost of a purchase? Give an example of an opportunity cost you experienced this past week.
The money you spent on this purchase could have been spent on something else you value. An example from this past week for me, is that I bought myself soda and candy for a road trip, but the opportunity cost of that is that I can't spend that money on something else like, say, a burger and fry from a fast food place during the car ride.
20. Are some things so important that we should do them without considering the costs? Why, or why not?
No. Saying that we should do some things without considering the cost is the same as saying we should do some things without considering the alternatives. You should always consider the alternatives, because no matter how important the thing you want to do is, or how good your idea is, there may be an alternative that is better or more important.
21. State and federal governments currently supply various goods and services, such as housing, public parks, education, and health care, to citizens and charge them either nothing, or far below the full cost. Is free housing for poor people or free education for everyone, really free?
No. The cost of them, is the opportunity cost. The cost of not being able to spend the time or money on something else that may be either just as valuable or more valuable. They use scarce resources that could be used for something else.
22. Understanding “opportunity cost” is a powerful tool that will be applied throughout your CSE text and this course. According to the CSE authors, what is the result of integrating this tool into your thought process?
You start considering lost opportunities for every action you take, and you carefully consider what other actions are available and what is the best before taking one. Whether this be with spending money or time.
23. What is the cost of traveling the road taken?
Not being able to travel the road not taken.
24. Why has economics often been referred to as the "dismal science"?
Because it studies the most fundamental of all problems, scarcity.

The Road Not Taken by Robert Frost

Opportunities and Costs by Dwight Lee

Day 5 - Discovering Economic Principles in Everyday Life

Decision Making, Marginal Value and Trade

Day 6 - Critical Thinking Assignment

Why Learn Economics?