This chapter served as an introduction to the rest of the course and as an overview to the field of Macro Economics. Titled “The Ten Principles of Economics”, it separates the ten principles into three sections of how trade can make everyone better off, how people interact, and how the economy as a whole works. There are many examples provided, both of everyday life and significant moments in US and global economies, to help the reader recognize the significance and the relatability of these principles to the real world.
This chapter made me think of many economic concepts differently than my previous beliefs. The topics seem to be fairly straight forward and easy to comprehend, and yet the assisting examples give depth to the meanings which resulted in both a better understanding and further curiosity for the principles. For example, while I was aware of what an opportunity cost was, I have always felt challenged defining it. However, when thinking of it in the context of college tuition compared to money that could be made by working a job during that year, a reality that I am currently experiencing as a student, it made the concept much more attainable and easy for me to understand because I can relate to it on a personal level. Furthermore Principle 4 describes that people respond to incentives, which seems fairly straight forward. Yet, the author uses the example of the seat belt law and how it resulted in speeding and less safety for pedestrians, which are implications I had never considered. The author also described economies to have an invisible hand which I find to be a great visual and very helpful, which I have never heard in previous lessons about economics. These examples made the reading more enjoyable and allowed me to put a specific example, or multiple, with each principle to understand it better.
While I felt this chapter did a great job of summarizing the topics and information that will be further developed in the course, there are definitely new questions I have about the US economy based on the reading. My most pressing questions would be concerning efficiency and equality. These concept clearly guide economic decisions, both of the government and individuals, and I am curious exactly how and when these decisions are important, as well as how they guide our everyday choices. I also found that there were positives and negatives to some of the principles and that there is clearly debate surrounding how they can be applied. For example, how inflation causes price to rise in the long-run but a decrease of unemployment in the short-run. This is very interesting to me and I am curious to learn more about this relationship, as well as that between the government and economies in general and the balance they must find.
I look forward to learning more about these topics and now that observing them in the real world, now that I have been introduced to them.
CCheo Macro Economics 