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A new In The News box, “Environmental Economists” replaces the old “Why Should You Study
Economics” box.
LEARNING OBJECTIVES
two simple models—the circular flow and the production possibilities frontier.
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1. Economists try to address their subject with a scientist’s objectivity. Like all scientists, they make
appropriate assumptions and build simplified models in order to understand the world around them.
Two simple economic models are the circular-flow diagram and the production possibilities frontier.
2. The field of economics is divided into two subfields: microeconomics and macroeconomics.
Microeconomists study decisionmaking by households and firms and the interaction among
households and firms in the marketplace. Macroeconomists study the forces and trends that affect
the economy as a whole.
3. A positive statement is an assertion about how the world is. A normative statement is an assertion
about how the world ought to be. When economists make normative statements, they are acting
more as policy advisers than scientists.
4. Economists who advise policymakers offer conflicting advice either because of differences in scientific
judgments or because of differences in values. At other times, economists are united in the advice
they offer, but policymakers may choose to ignore it.
1. Assumptions can simplify the complex world and make it easier to understand.
C. Economic Models
To illustrate to the class how simple but unrealistic models can be useful, bring a
road map to class. Point out how unrealistic it is. For example, it does not show
where all of the stop signs, gas stations, or restaurants are located. It assumes that
the earth is flat and two-dimensional. But, despite these simplifications, a map
usually helps travelers get from one place to another. Thus, it is a good model.
Show them the airplane model kit. Describe some of the details included in model (rivets,
canopy, struts, etc.). Shake the box to rattle the large number of parts. This is a fairly
realistic model, although obviously not a real airplane. Its complexity adds realism, but at a
cost; assembling the model is very time consuming. Drop the box on the floor. Tell the class,
“This model, even when completed, cannot fly.”
Take a sheet of paper and fold it into a paper airplane. Show the class this new model. Its
virtues include simplicity and ease of assembly, but it is less realistic than the airplane model
kit. Throw the airplane and explain, “While less detailed, this model can glide through the
air.”
Show the students the whirl-a-gig wing toy. This model looks nothing like an airplane – just a
T-shaped piece of wood. Yet, this model does something that the other two models cannot
do: it actually generates lift. This toy demonstrates the same aerodynamic principles as a real
airplane wing. Twirl the stick between your palms and the whirl-a-gig wing toy will fly over
your head.
Economic models are like the whirl-a-gig wing toy. They are much less complex than the real
world, but they can show how markets actually work.
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70. I greet thee my internal spirit! that floatest in the shape of a swan
(hansa) in the lake of the mind (manas) of every individual, and residest
in the cavity of the lotiform cranium (Brahmárandhra), with thy
outstretched wings of consciousness and standing.
71. All hail to thee, O thou full and perfect spirit! that art the
undivided and immortal soul, and appearest in thy several parts of the
mind and senses; like the full-moon containing all its digits in its entire
self.
72. Obeisance to the sun of my intellect! which is always in its
ascendency and dispels the darkness of my heart; which pervades
everywhere, and is yet invisible or dimly seen by us.
73. I bow to my intellectual light, which is an oilless lamp of benign
effulgence, and burns in full blaze within me and without its wick. It is
the enlightener of nature, and quite still in its nature.
74. Whenever my mind is heated by cupid’s fire, I cool it by the
coolness of my cold and callous intellect coolness; as they temper the
red-hot iron with a cold and hard hammer.
75. I am gaining my victory over all things, by killing my egoism by
the Great Ego; and by making my senses and mind to destroy
themselves.
76. I bow to thee, O thou all subduing faith, that dost crush our
ignorant doubt by thy wisdom; dispellest the unrealities by thy
knowledge of the reality, and removest our cravings by thy
contentedness.
77. I subsist solely as the transparent spirit, by killing my mind by the
great Mind, and removing my egoism by the sole Ego, and by driving the
unrealities by the true Reality.
78. I rely my body (i.e. I depend for my bodily existence), on the
moving principle of my soul only; without the consciousness of my self
existence, my egoism, my mind and all its efforts and actions.
79. I have obtained at last of its own accord, and by the infinite grace
of the Lord of all, the highest blessing of cold heartedness and
insouciance in myself.
80. I am now freed from the heat of my feverish passions, by
subsidence of the demon of my ignorance; from disappearance of the
goblin of my egoism.
81. I know not where the falcon of my false egoism has fled, from the
cage of my body, by breaking its string of desires to which it was fast
bound in its feet.
82. I do not know whither the eagle of my egotism is flown, from its
nest in the arbor of my body, after blowing away its thick ignorance as
dust.
83. Ah! where is my egoism fled, with its body besmeared with the
dust and dirt of worldliness, and battered by the rocks of its insatiable
desires? It is bitten by the deadly dragons of fears and dangers, and
pierced in its hearts by repeated disappointments and despair.
84. O! I wonder to think what I had been all this time, when I was
bound fast by my egoism in the strong chain of my personality.
85. I think myself a new born being to-day, and to have become
highminded also, by being removed from the thick cloud of egoism,
which had shrouded me all this time.
86. I have seen and known, and obtained this treasure of my soul, as it
is presented to my understanding, by the verbal testimonies of the
sástras, and by the light of inspiration in my hour of meditation
(samádhi).
87. My mind is set at rest as extinguished fire, by its being released
from the cares of the world; as also from all other thoughts and desires
and the error of egoism. I am now set free from my affections and
passions, and all delights of the world, as also my craving after them.
88. I have passed over the impassable ocean of dangers and
difficulties, and the intolerable evils of transmigration; by the
disappearance of my internal darkness, and sight of the One Great God
in my intellect.
CHAPTER XXXVI.
HYMN TO THE SOUL.