Lesson1.

Introduction to economics

Teacher: Francisco Caballero Sanz (francisco.caballero”uv.es)

Term: Fall – winter 2022 -2023

Mondays: 10:30 – 12:00

Thursdays: 12:30 – 14:00

TAKE INTO ACCOUNT:

There are books that we need to buy. You can find them on the slides

There is homework to do to practice, in this way you will be prepared for the quizzes.

You have to learn a little bit about programming on python, etc (you can practice on github)

Exams:

Quiz 1: Units 1-3 (0,75 points)

Quiz 2: Units 4-6 (0,75 points)

Quiz 3: Units 7-8 (0,75 points)

Topics covered in this course (on the slides)

CLASS TODAY

1. The economy, ecomics and the economic approach

What is an economy?

*It is a set of all the production and exchange activities that take place everyday

*It is the science that studies human behaviour as a relationship between ends and scarce
means which have alternative uses.

2. Basic principles in economics

*Economists look into the interaction between agents:

-Using simplified environments (to improve our understading of the world)

(A model will contain variables)

Endogenous variables: value is determined within the model

Exogenous variable: value is determined outside the model

Model are more unstable the longer the time period being considered and forecast
 - Making assumptions and considering changes

- Information is key (ex. A business need to take into consideration other businessess to set
prices)

- WATCH OUT: “Opportunity cost” is a very important concept. Focus on that

*Types of reasoning:

Deductive reasoning.

Inductive reasoning

*Experiments in economics

Economics is science based on human behaviour