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Economics I

Many problems in the world today are economic in nature. A Christian, with a strong understanding of economics, can address man's spiritual poverty and his material poverty.

Section I

An Introduction: The Nature of this Course

This course is designed to introduce the beginning student to the subject of economics through the "Great Man" approach. The course will follow economic ideas by profiling the leading economic thinkers throughout history. The material provided throughout will present descriptions of theories, ideas, and thinkers and provide internet links to as many of the original writings as possible which will allow the student to read the original works.

It is our belief that by studying the Schools of Thought and the people who developed the discipline we can get a better understanding of the discipline itself. Economic vocabulary is introduced when appropriate and is set off in "New Term" blocks so that each term is actually learned in conjunction with its initial use.

New Term: A School of Thought is a set of theories that attempt to explain the observed behaviors of the economy. A School is not usually a physical location but more likely a group of economists who all basically agree. A School may be "headed" by one person, usually the originator of the ideas and then populated by any number of adherents. Schools are often related, one School may be an offshoot of another or one may rise up in direct opposition of another.

Each section is divided into subsections, allowing it to be completed over several class periods. It is the intent of the course designer for completion of this course to take approximately 36 classroom hours, 1 hour a week for a standard 36-week school year, however there are no section breaks written into the course and the student has the flexibility to move at his own pace.

How is Progress Measured?

There are several measures of the student's progress; some graded and some not.

At the end of each section there is a link that directs the student to the quiz for that section. The quiz will consist of true-false and multiple choice questions, this method of evaluation is necessary to allow the computer to provide a grading service.

However, there are also "Questions for Thought" in each quiz. These are short answer type questions that are not included in the student's grade but do allow the student the opportunity to demonstrate applied knowledge and will be retained on file for the student's later use (college applications maybe) and will be available on request.

There are also self-check fill-in-the-blank questions periodically placed in the course material. These are not included in the student's grade but are very useful for the student to do before the quiz.

What Makes This Economics Course Different?

That is a good question and I am glad you asked it.

This course is very much within the classical tradition. Instead of introducing the student to economic concepts in a sterile and somewhat disjointed way, as many textbooks do, we present the development of economics as a historical progression. This is the kind of course many do not get until they are in an upper level college course. For example, studying the changes in economics brought about by the Great Depression will make much more sense if the student knows how economic thinking had developed up to that point.

This course also uses the Bible as much as any other book. In many cases the student is presented with the economic ideas of a certain thinker or school of thought and then asked to read Bible passages and compare the two. In some cases the economic ideas imbedded in the Bible are incidental to the verse but when examined within an economic context it opens up a new way to see the verse. In other words the student will determine what is appropriate not by what seems to work but by what is Biblical.

Parting Thoughts

This is a survey course -- an attempt is made to discuss many of the important developments and people in economic thought -- but space limitations and focus inevitably forced some decisions to be made and undoubtedly some people and developments have been left out. We apologize for this, but it can not be helped.

All links to reading material were checked repeatedly and are checked periodically but should you encounter a dead link please inform us as soon as possible.

Thank you for choosing this course -- we hope you find it useful and look forward to your feedback.

What is Economics?

The standard definition of economics is the study of how people "allocate scarce resources to meet unlimited needs and desires". To better understand what that means, let us dissect the definition. "Allocate scarce resources" refers to how we divide and use the assets that are available to us. An asset is any item that has some use to us. We usually think of things like money, oil, and land as assets (resources) but so are time, intellectual ability, and new ideas. "Unlimited needs and desires" refers to the fact that people generally prefer more goods and services as opposed to less. Whatever it is, an extremely wealthy person wanting a vacation home or an extremely poor person needing more food just to survive, people usually want or need more of something.

Economics has been referred to as the "oldest of the arts and the youngest of the sciences". Indeed the study of economics did not become its own subject of study until about 100 years ago. Economics has been considered a branch of theology, law, philosophy, and politics at different times in history and to some extent this is all true. This inability to classify the subject for many years demonstrates how economic decisions permeate all aspects of our life. Everyone has made an economic decision (the "art" side of it) and most of us make several each day, but the study (the "science" side) of how and why we make decisions, is relatively new -- just a few hundred years old compared to astronomy, for instance, which is thousands of years old. An example may be useful. If you had an extra dollar right now, what you decided to do with it is an economic decision. At the basic level, you have two options: spend or save (obviously you can spend some and save some, but these are still your two basic options). From there, you have many options; if you save it, do you just hold it in your wallet, put it in the bank, or invest it somehow; if you spend it, what do you buy? You may not take more than 30 seconds to decide what you would do with that extra dollar and you may not even realize that you go through this thought process, but you do. Buy a car or a house and you become more aware of this thought process. Assuming that you were able to make your decision freely, (not forced by a parent or some other authority), the economist assumes you chose that which would give you the greatest Value.

New Term: Value is the foundational concept on which economics is built. What do we value? Why do we value certain things? What is the relationship between value, price and production costs? These questions and the many more like them are the heart of economic analysis. A good short definition of value is "what one holds as important", but defining this term is part of the reason economics exists.

Finding the value of things has driven economic thinkers for centuries. What a person values is determined by a variety factors that can be commonly referred to as a value system. Economics focuses on part of the value system; resources used to meet needs and desires. The two core economic concepts are Supply and Demand.

New Terms: Supply is the economist's way of referring to what is produced. The things that are produced are referred to as Goods and Services. Any item consumed can either be classified as a good or service and must be produced by someone. Goods include houses, cars, blenders, clothes, and any other tangible product. The producers (suppliers) of these items include construction firms, automobile makers, appliance makers, clothing makers, etc. Services include education, lawn mowing, baseball games, gospel preaching, etc. Most suppliers (church and charity excepted) are in business to make a profit and they can only do so if people want the goods and services they produce, this is called Demand.

Demand is the term used to refer to what consumers of goods and services wish and are able to buy. Supply and demand are driven by many factors, which we will discuss as the course progresses.

How Supply and Demand interact is what determines price, as we shall see later. For a Christian, all decisions should be made within a Biblical framework. And, while the Bible does not lay out a specific economic system, it does give us principles by which to evaluate economic systems. As we present different economic theories we will evaluate each one in light of scripture to discover how it is consistent and how it is not consistent with the truth.