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Have you ever wondered why political figures claim that we need to implement a stimulus plan, or what the Federal Reserve’s job is? Do you have questions about why countries trade, why a gallon of gasoline cost .10 cents in your parents’ time, or even why we have a paper currency that doesn't’t seem to have its value tied to anything?
- What is Economics?
- First Four Weeks
- How the Class is Taught
- Tips for Success
- How to Get That A
Economics in general is the study of how people make the decisions they do when faced with tradeoffs. Economists study questions like ‘what would consumers do if the price of a new car rises by $1000?’ Surprisingly, Economics really has little to do with money. It is a useful measuring tool, but the goal of the economist is not to determine what makes the most money: Economists study behavior of individuals and firms under the assumption that they behave as if they were trying to maximize their benefits.
What is Macroeconomics?
Macroeconomics studies the larger (“macro”) picture of the economy. Issues like inflation, unemployment rates, and international trade are all under the umbrella of macro. Taking a macroeconomics course will provide you a greater understanding of:
- The business mindset – how people in a business profession talk about and interpret their field.
- A greater understanding of modern affairs – Why is Greece a threat to the EU and the global economy? Why is a political candidate is in favor of a certain economic policy?
- What affects the macroeconomic environment and the interconnectedness of the world – If the U.S. implements a tariff on foreign oranges, how will that effect the price of oranges domestically? How does that tariff affect countries exporting to the U.S.?
“Very often, in the political discourse or when you’re trying to learn something on your own by reading newspapers, your attention gets drawn to something flashy. You know, you’d be like ‘Oh, oil prices went up, it’s because of the conflict in the Middle East and the supply dropping’, and you’re like ‘is that true?’ Let’s see what our supply and demand tell us. Well, if that were the case, then, if the supply was actually limited the quantity of gasoline that we purchase should drop, but it actually went up. So it can’t be the supply, it’s got to be the demand. And then that shifts you to a whole new set of issues that you could consider to understand what’s going on.”
~Alexander Skiba, assistant professor in economics and finance.
What is Microeconomics?
Microeconomics is the study of economics on the individual or firm level. It looks at why individual consumers or groups make the choices they do. This field allows you to study questions like “why do people buy more soda when it goes on sale?” Questions like these may sometimes appear to have a common sense answer, but in reality there is much complexity in the simple choices that we make. In a micro class you will cover topics such as supply and demand at a greater depth than a macro class, but there are still different quirks and focuses when looking at the economy as a whole.
Students who are planning on taking micro and macro at some point in college (or who took a similar class in high school) may feel that taking micro before macro would make the latter easier. Even though there are several parts of macro that are based on micro concepts (and knowing the basics is always helpful) don’t assume that macro will then be a breeze. There are still unique parts to grasp in the course.
“A lot of people think that the entire economy is just the sum of the individual, but it’s not. There’s all these kinds of phenomenon that just kind of happen as we move from the individual to the macro. But, we can learn a lot from the individual about what’s happening on the macro level. So, they are intimately tied but they are different.”
~Chian Jones Ritten, assistant professor in economics and Macro 1010 teacher.
These first few weeks cover the basic cornerstones of economics, such as supply and demand and opportunity cost, but they will all be connected to macroeconomic terms.
Overall, there will be very few surprises in your class. All the information about homework and quiz due dates, what your lecture covers, and test days are all listed and provided in advance. If it ever has to change, it will be due later than normal, never earlier. The class is also developed by the economics department, meaning that all the information that you will cover in your section will also be covered at the same time as another section.
The tests will vary depending on the section you're in. Your teachers write the test, and each teacher will come up with their own tests. Your teacher may also let you bring in a ‘cheat sheet,' a small card that you can write anything on. Even if you don't need to use it, making one can help you review. For the final, part of the test is created by the economics department and the rest by your teacher. Each teacher has a different pace and focus for the class, and the final reflects that. It is also cumulative test, with every student from every section taking it in the same place at the same time. Sounds intimidating, but you still get the cheat sheet for this test as well.
Major parts of this class (as well as other economics courses) are math and graphs. Math is one of the languages of economists, and many course concepts covered are in the form of an equation. The math itself will look familiar (like calculating the area of a triangle), but it may help to refresh your high school math skills. The graph is the other language of economics. Every concept or example in your class will likely have a corresponding graph. Graphs start off simply, but eventually they can begin to look like a little spider web, as additional concepts add more lines and dots are added to it.
For the principle economics courses (macro and micro economics), the math is kept around the basic algebra level. Essentially the class runs around formulas and finding the area of objects on a graph. An example of one of the formulas is Gross Domestic Product, or GDP, which is used as a way to determine the size of an economy. That equation is:
Y (GDP) = C (Consumption) + I (Investment) +G (Government Spending) + NX (Net Exports)
One of the more difficult formula for this class is percentage. For example, you will learn how to calculate how much GDP has changed between two time periods. The formula for that is
(New GDP - Old GDP) / Old GDP = Percentage changed
So lets say that GDP in a country in 2005 is 100, and by next year it increased by 50%. With this you can figure out what the new GDP is. Plugging in the numbers you get
(New GDP-100) / 100 = .5
The 100 went in for the old GDP, and .5 is 50% in decimal form (Multiply by 100). From there you can use algebra to get the New GDP number by itself. First you would multiply both sides by 100 (Undo the division on the left side), giving you New GDP - 100 = 50. After that you add 100 to both sides (Undo subtraction by 100), giving you 150 on the right (The New GDP).
The key to most math problems is simply figuring out what number plugs into where and then using those numbers to find out what's missing.IF you can do the problems presented here you will have no problems with math in this course.
If you need some help reviewing here are some resources you can try:
- Math Lab (Room 29, Basement of Ross Hall)
- Handy website
Economists love graphs, and this course will involve finding the area of different parts of those graphs to figure out the amount of something.
Here is an example of a graph showing supply and demand:
This is a type of graph that will be referenced a lot, since it is a basic principle of economics that has applications in many areas of the field. For the most part it helps determine what the optimum price of a product is.
But what does this have to do with finding the area of something? Let's add a little to the graph:
The little dotted lines lining up at the place where the supply and demand line intersect shows the equilibrium price, the spot where both the buyer and the seller gain the most for a sold product. Area 1 shows the consumer surplus, or how much the consumer gained from the transaction, and area 2 is producer surplus, how much the producer gained. Now if we look at both those area, we see that they are triangles, and if we calculate their areas we can see the total gains for both sides. On both axis of the graph there are a few numbers that can be used to figure out the lengths of each side.
Looking at the last graph, we can see that each triangle has a height of 5, and a base of 6. And the area of a triangle is:
Base x Height
Making the area of the triangle in this example 15.
These are the basic math principles for this course, and they will be built upon as the class goes on. The key is to not let the content intimidate you, but break down the problems into these key parts. Once you know the parts the puzzles the class presents will fall into place. Just remember that if something is not clear you need to talk to your instructors earlier rather than later.
"What I think is sometimes the problem is that the students wait too long. And you know because, in economics especially...sometimes topics pile up, they build on what you've learned before, right? ...And sometimes students don't seek help and when they come to me before the final I'm like ‘woah!' I mean I'll help you as much as I can, but we'll have to cut our losses. Let's focus on same major things you know, or could improve on. And that's where some math and that stuff comes in and you'll think ‘Yea, I'll figure out how to do a triangle,' and then all of a sudden you get a triangle, then two triangles, and then the bigger area, and you get something else and you need to interpret that and do something with it, and at some point your like ‘woah!' and you completely get lost."
MyEconLab is an online resource and where you access your online homework and quizzes. You can gain access to it by either purchasing the textbook, which includes an access key, or purchasing access through the Pearson education website. Purchasing it online has two options: Course access with or without an online textbook.
When logged into MyEconLab, you will see a variety of sections on the left hand side of the screen:
Economic News - This news updates related to the information in your book, as well as exercises related to these articles. If you want to see how class concepts are applied in real life situations, take a look in here.
Quizzes and Test - You can access your online quizzes here. There are some premade tests for different sections of the textbook. Taking a few can be useful practice, but make sure to filter it through what you are covering in the course, since not everything in here is what your class is teaching, and vice versa.
Study Plan - As you do your homework and quizzes, this section will update and develop a study plan as you go along. Just got done with an assignment that covered scarcity, but you missed a few of the questions? Then this section will place a red arrow on the chapter and section that the information is in and provide some questions related to the topic. Once you answer the questions, you can go back to the homework section or the sample tests to prove that you have mastered the content. Like the tests section, remember to filter out what you need to know.
Homework - This section stores your homework assignments, both past and present. An excellent reviewing tool for quizzes and tests.
Results - You can use this section to look at all your quizzes and homework assignments. It links to all of your assignments and is a quick way to navigate to them.
Calendar - A handy calendar that shows you when each quiz and homework is due. However, it does not show tests on here since they are not taken online.
The website also has some items related to your book, such as:
Glossary Review: You can see all of the terms for the course as well as practice them with a link to an online flashcard site where you can review them.
Power Points: The book company made some power points that go along with the text, so if you want another look at the information you can get it.
Study Guides: These pre-made study guides are available to help you review for courses. Chances are you will probably not need to know all of the information on here but it is good way to get a direction on where to study.
Videos: Each section has a few videos paired with it that show real news showing economics playing out in real life.
Online Textbook: You can find the electronic version of your textbook here.
1. Once again, remember to compare what you cover in class and what you can find online. There is a lot of information to cover in one semester, and your teacher will cut out information that is not pertinent to the main content. The information is available if you are interested, but remember to understand the key points your teacher is trying to convey first.
2. When you are in MyEconLab, you will notice that it lists grades for your assignments and quizzes. These grades are incorrect, however. MyEconLab has a certain point value ascribed to each of the questions, but your teacher will have a different value system. For example, a teacher might have each homework assignment worth 10 points. Your teacher may want to vary the amount of questions on each assignment, but MyEconLab has a flat 1 point for each question. Hence, if you have a 25 question assignment online, the value it is given online (25 points) is not the same as the real grade (10 points). It also doesn't list your test grades. If you are calculating what your actual grade is, don't rely on the website.
*Currently this program is used for this course, but that might change down the road depending on the views of the department or the instructors.
Read the book
It's easy to just forgo the reading and depend on the class lectures or homework to learn the assignment, but interacting with the information as much as possible will help lead you to that ‘ah-ha!' moment when it all clicks together. There are numerous opportunities to interact with class material, so don't skip your textbook as a resource.
Go to lecture
Always go to class. Not just Macroeconomics, but all of your classes. Did you know that students who skip class, even just once a week, earn on average 1.0 less on their GPA? And you never know what tips or explanations your teacher may give to unlock the subject matter for you.
Expect some variety between classes
Each section will cover the same material, but the presentation may be different. Some professors may have different homework assignments due before the class they are covered, or may have a quiz a week. Some may have their quizzes right before a test, designing it like a mini-test. Each class will have its own quirks, and if there is something that you are worried or confused about just talk to your professor. How else will they know a student doesn't like something if no one mentions?
Look at or do homework before lecture
Whether you just look at it or do it before class will depend on when it is due, but doing either one will make the lecture more interactive and useful. Instead of just sitting there dazed and confused over what the professor is talking about, you can engage and think about the material that is presented. The lecture will also serve to reinforce what you have learned, meaning you need to review less.
Keep up with the content
Study the content as it comes up. It will be fresh in your mind and you won't have to cram right before your tests
Supplemental Instruction (SI)
SI is a group that provides sessions for different classes on campus. The sessions will typically meet once a week. SI also provides longer sessions right before a test.
Whether you have a question or just want studying advice, your professor and TA's are more than willing to help you out. Your professors are also experts in their field; they have spent their whole educational careers studying what they are teaching you.
"Every professor on this campus is paid by students and obliged by their contract to hold office hours. If you can't meet during office hours, most professors will accommodate. I'm here wiling to help. If you want me to take a problem and go over it ten times, I'll do that. On top of that, there are two TAs, who have exactly the same duty. They have office hours where if you come to them and ask ‘can you solve this problem ten times for me?' they will help you. They might get mad and kick you out eventually, but they'll definitely help you as much as they can."
Gather a few people from your class, meet up someplace cozy, and chat about economics. You might get some new insights on your class, develop new study methods, or be extra prepared for an exam. Just remember to practice true collaboration, meaning everyone takes equal responsibility to learn the material, otherwise you are not using the full potential of this study group.
Something else you can do in study groups is to make it a teaching session. Have your group divvy up the topics, and have each person teach it. One person could cover monetary policy, another comparative advantage, and so on. Being able to teach it is one way to show you have mastery of a subject.
Cramming just puts a lot of stress on yourself, and you may not get all the information you need. Just by studying a little bit every week you get more out of your study time than waiting until the last minute.
"People who wait ‘''til the last minute to study might have to spend 10, 12 hours to get the information. But if you're constantly working at it then you're constantly reminding your brain how this works, you're remembering it, and so when you go to study for the exam you can study for a lot less time and feel comfortable... And I think if you spend time earlier you actually spend less time overall than when you cram. So you spend an hour a week, for an exam, so that's a total of five hours. And you spend 2 hours studying for the exam, so that's seven hours. If you cram it might take you seven to 10 to 12 hours to get the same amount of information down."
~Chian Jones Ritten
Here are some tips to help you get A in macroeconomics
Redefine the terms
Don't memorize a definition, make it meaningful for you. For example, the Law of Demand might be given as "holding everything else constant, when the price of a product falls, the quantity demanded of the product increases, and vise versa." You could simply say if something is cheaper, people will buy more of it, and vice versa. The key is figuring out how you are best able to conceptualize the information while getting all the key parts. To test your definition, you could try explaining the concept to a friend who doesn't know much about economics. If you can teach it, then you have a good grasp on it.
Break it down
When looking at the base definitions of class concepts, it can seem like an overwhelming wall of words that make little sense together. The key to dealing with this is to just break the definitions into smaller parts. Looking at the Law of Demand again, you could break it down into:
"<Holding everything else constant>, <when the price of a product falls, > <the quantity demanded of the product increases, > <and vise versa. >"
The way I did it here was break the sentences into steps (When this, then this) and then highlight what changes when this happens. How this is done is different for each person, but breaking the concepts into more manageable bites can help you figure out what the definitions are trying to say.
Economics is primarily math based, and there are plenty of concepts that are solved in a systematic fashion. Just like in math (and most walks of life), practice makes perfect. There are several places you can find examples (MyEconLab, Google, textbook, lecture) and repeating them will help you know it when you are tested on it.
Make your own study guide
Even though there are other study guides already available, it can be beneficial to make your own. It will be customized to you, in a language that is understandable to you. It will also push you to review all the material that has been covered, making you summarize and write down the information from the course. Just start with a list of all the topics in the class, and then fill out all the keys aspects of each section. You'll be surprised at how much more you can remember.
Truly test yourself
Testing yourself on the information you know is a great way to show yourself that you understand the material. There are practice tests available, either through MyEconLab or some that your professor created. The key is to actually test yourself, not just look at the questions and answers side by side and say that you know it. If you don't take off the training wheels how do you know if you can ride?
This guide was made possible by information provided by by Alexander Skiba and Chian Jones Ritten.