STUDY TIPS FOR ECONOMICS COURSES
(a condensed summary)
TAKING NOTES IN CLASS
- Before class: At least pre-skim related readings and review lecture
notes from previous class; look at problems in the study guide; make
note of new terms, concepts, measures, models, graphs, and theories;
formulate questions.
- During class: Have questions in mind as the lecture begins; adapt a
format which allows a wide left-hand margin for summarizing and editing
your notes plus a narrow right-hand margin for recording your own
insights, questions, etc.; be alert to assumptions underlying hypotheses
and note how hypotheses are tested against observational data.
- After class: Review and edit your notes; use the left-hand margin to
summarize material and list key terms; "test" yourself as soon as
possible to recall lecture highlights.
READING THE TEXT
Preview the material: Look at
sub-headings, graphs, questions at the end of chapter; note new terms.
- Read actively: Formulate questions before you read
(from lecture notes and preview) and then read to answer those
questions; translate abstract concepts to specific instances; know what
every term and symbol means.
- Analyze graphs thoroughly: What "economic story" is being told?;
what are the assumptions?; note units of measurement on each axis; note
direction (positive or negative) of the relationship.
- Recall: Test yourself immediately and cumulatively at the end of
each section; then use a combination of marginal notations and
underlining to summarize.
- Reflect: Set aside time to question and criticize what you've
read--then make notes of those thoughts.
PREPARING FOR EXAMS
- Integrate and review lecture and text notes; make a list of key
topics, concepts, problems, theories, models, and terms.
- Review via ACTIVE RECALL rather than just passive re-reading.
- Re-work homework questions and workbook problems.
- Practice using the information in the form that will be required by
the test format; predict test questions and problems and practice
answering them.
- Realize that various test questions will ask you to know,
comprehend, apply, and analyze what you've studied.
TAKING EXAMS
- Glance over the whole exam quickly, assessing questions as to their
level of difficulty and point value; set time goals for each section
accordingly.
- Begin to work the questions which are easiest for you; the others
will be easier when you've "warmed up."
- Maximize partial credit possibilities by attempting all questions.
- Save time at end of exam for re-reading and editing.
- Analyze returned tests to prepare for future ones.
WORKING WITH GRAPHS IN ECONOMICS
(prepared by Vincent Geraci, Associate Professor of Economics,
for
the UT Learning Center, University of Texas at Austin 10/82)
At one of our well-known colleges, students have their own names for
all the courses. They call the astronomy course "stars," the geology
course "rocks," and the biology course "frogs." Their name for the
economics course is "graphs and laughs." (story by E. G. Dolan)
Well, I don't know about the laughs, but I'm sure about the graphs. A
good picture is worth many (if not a thousand) words, so economists use
graphs to illustrate the theories they develop about people's economic
behavior. As an aid to studying economics, we need to master the basics of
working with graphs.
We first bearded the "line's den" in high school when we encountered
those two cats, "y" and "x." We wrote the linear equation:
y = b + mx
where y is the dependent variable, x is the independent variable, b is
the vertical intercept, and m is the slope (sometimes described as "rise
over run"). Illustrative graphs follow:
The master of modern video games realizes that we are working in the
Cartesian coordinate system with the northeast quadrant reserved for
positive thinking (i. e., both axes are positive.)
* Economists like to scramble matters a bit (and maybe your mind in the
process) by using symbols other than y and x. For example, consider the
basic relationship between household consumption and household income. A
simple model of household consumption behavior is the linear function:
C = a + bY
where (a > 0, 0 < b < 1)
where C is consumption (in dollars), Y is income (in dollars), a is
autonomous consumption (in dollars), and b is the marginal propensity to
consume (pure number).
Note that the preceding relationship is just the linear equation from
before with new actors:
Earlier b denoted the intercept; now b denotes the slope. It obviously
pays not to become hooked on a particular notation. "To b or not to b;
that is the question." (Pardon the sick humor.)
The linear consumption relationship, by its constant slope b, embodies
the special economic assumption that households consume a constant
fraction out of each added dollar of income. Also, consumption generally
rises with income; hence the slope b is positive.
When learning a new graph in economics, first ask yourself the purpose
of the graph. What economic story is being told? What are the economic
assumptions and the lessons? Be sure to note the units of
measurement on each axis (dollars for both C and Y) and the
direction of the relationship (positive for C as a
function of Y).
* Of course, household consumption depends on a great many factors
besides income, e.g., household size and composition, individual
expectations about future prices, and so on. Since these other
determinants of consumption do not appear on the graph, the effects on
consumption of changes in them are captured by shifts of the entire
consumption line. If the change spells increased consumption for any given
level of income (e.g., household size increases), then the line shifts to
the left. If the change spells decreased consumption, the line shifts to
the right.
Shifts must be distinguished from "movements along" a particular
consumption line. The latter reflect changes in consumption that are
produced by changes in income itself.
* Most economic behavior involves multiple behavioral relationships.
The prototype is the simple supply and demand model for an individual
commodity in a competitive market. Continuing to assume linear
relationships for simplicity, we may posit:
Here QS is quantity supplied,
QD is quantity demanded, P is price, a and
b are respectively the intercept and slope of the supply schedule and c
and d are respectively the intercept and (magnitude of the) slope of the
demand schedule. Of course, a and b represent different constants here
from those of the consumption function. I reused the symbols, a and b, to
emphasize that one must avoid memorization of symbols. After all, symbols
mean nothing out of particular economic (or other) contexts.
* The market equilibrium (temporary place of rest) may be illustrated
as
The intersection of the supply and demand lines illustrates the market
equilibrium ("E") in which quantity supplied equals quantity demanded
equals quantity transacted (QS =
QD = Qe)
at the equilibrium price Pe. For prices
above Pe, there is excess supply
which--assuming competition--will drive the price down. For prices below
Pe, there is excess demand which will
drive the price up. The equilibrium is reached at point E.
* As a final exercise in using graphs, suppose that some determinant of
quantity demanded other than price changes; then the demand curve shifts.
If the change increases quantity demanded at any given price (e.g.,
consumer incomes rise), then the demand curve shifts to the right. In this
event both equilibrium price and quantity rise.
In learning supply and demand analysis, you should evaluate the effects
on price and quantity of various, alternative changes in the economics
determinants. Graphs usually prove an invaluable aid.
LEARNING ECONOMICS: IMPOSSIBLE OR IMPOSING
(Jack Mogab and De Johnson, Southwest Texas State University)
QUESTION: Why do many students discover the principles of economics
courses as one of the most difficult experiences in their first two years
of college?
ANSWER: Because these two introductory courses combine the study of
economic models with both analyses and applications of those models. These
three aspects of mastering economic theory rely on a basic understanding
of the special language of economics.
Since most of you did not study economics in high school, you come to
college economics courses without that special language or prior knowledge
of general economic theory. Yet you must demonstrate that you can analyze
and apply these theories in order to achieve an understanding of
economics.
The following examples demonstrate this academic challenge. The first
level of academic performance is knowledge - the
remembering of previously learned material. Whenever you learn (i.e.,
remember) specific facts or explanations or definitions, you are
functioning at the knowledge level. A test question at this level might
be:
QUESTION: To say that two economic goals are mutually exclusive means
that: (a) it is not possible to achieve both goals; (b) these goals are
not accepted as goals in the USSR (c) the achievement of one of the goals
results in the achievement of the other; (d) it is possible to quantify
both goals.
ANSWER: (a) it is not possible to achieve both goals
or
QUESTION: Profit is the reward paid to those who provide the economy
with capital.
ANSWER: False
This type of question is probably routine for you since knowledge level
questions are typically asked on high school tests. But in Economics, only
a few (15-20%) of test questions are at this level. Yet it is essential to
learn material in this way because you need the knowledge to function at
the next level.
Comprehension is the second level of academic
performance. It is the ability to grasp the meaning of material. This may
be shown by translating material from one form to another (words to
numbers), by interpreting material (explaining or summarizing), and by
estimating future trends (predicting consequences or effects). These
learning outcomes go one step beyond the simple remembering of material
and represent the lowest level of understanding. Several examples of
comprehension test questions are:
QUESTION: If an individual determines to save a larger percentage of
his/her income, he/she will no doubt be able to save more. To reason,
therefore, that if all individuals determine to save a larger percentage
of their incomes they will be able to save more is an example of: (a) the
post hoc, ergo propter hoc fallacy; (b) the fallacy of composition; (c) a
generalization that is true during a depression but untrue during
prosperity; (d) using loaded terminology.
ANSWER: (b) the fallacy of composition
QUESTION: If there is an increase in the resources available within the
economy: (a) more goods and services will be produced in the economy; (b)
the economy will be capable of producing more goods and services; (c) the
standard of living in the economy will rise; (d) the technological
efficiency of the economy will improve.
ANSWER: (b) the economy will be capable of producing more goods and
services.
Comprehension questions comprise 30-40% of most economics tests. (Note:
your first test in each course will probably have 50% comprehension
questions.) The third level, application, is the ability
to use learned material in new and concrete situations. This may include
the application of such things as concepts, principles, laws, and
theories. Obviously, to function at this level requires both knowledge and
comprehension of the relevant material.
Examples of application questions are:
QUESTION: The law of supply states that as price increases: (a) supply
increases; (b) supply decreases; (c) quantity supplied increases; (d)
quantity supplied decreases.
ANSWER: (c) quantity supplied increases
Using this table, answer the following question.
ANSWER: (d) law of supply
Using this graph, answer the following question:
QUESTION:
ANSWER: (a) law of supply
Notice that these three questions are essentially the same question in
different formats: verbal, numerical, and graphic.
Analysis, the fourth level, is the ability to break
down material into its component parts so that its organizational
structure may be understood. This may include the identification of the
parts, analysis of the relationships between parts, and recognition of the
organizational principles involved.
The analysis of the relationship between parts of a theory is
especially important in the study of economics. Examples of this level of
question are:
QUESTION: An increase in demand and a decrease in supply will: (a)
increase price and increase the quantity exchanged; (b) decrease price and
decrease the quantity exchanged; (c) increase price and the effect upon
quantity exchanged will be indeterminate; (d) decrease price and the
effect upon quantity exchanged will be indeterminate.
ANSWER: (c) increase price and the effect upon quantity exchanged will
be indeterminate.
(1409)
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