Imagine Magazine - Johns Hopkins - November/December 2013 - (Page 6)

Interested in Econ Macroeconomics and Microeconomics at CTY by Sabrina Choi W hen I was 12, I won second place in a school-wide stock market simulation competition. While I was a diligent math student and had occasionally competed in math competitions, I'd never been particularly interested in economics. The Stock Market Game changed that. It got me interested in how math was related to the world economy. In the summer before eighth grade, I decided to explore my new interest in economics through CTY's Macroeconomics course at the Hong Kong University of Science and Technology. 6 imagine On the first day of class, our teacher posed a seemingly simple question: "What is economics?" The entire class-around 16 of us-tackled the question with enthusiasm. "There are producers and consumers... it's related to the market... there is a supply and a demand... ." Although we came up with concepts related to economics, no one was able to define exactly what it was. Finally our teacher ended our misery by saying, "Economics is the study of how people make choices to attain their goals." I remember thinking, Isn't that a little broad? But over the next few weeks, our teacher helped us see her point. We began by examining the three underlying principles that, according to economic theory, people follow when faced with making a decision: People are rational; people respond to incentives; and optimal decisions are made at the margins, which are the limits beyond which something desirable becomes too expensive. We soon learned that, like grammar rules in English, these three basic principles underlie everything in economics. Predicting Human Thought and Actions While macroeconomics focuses on the behavior of an economy, building a macroeconomic model requires an in-depth study of individual behavior. To illustrate, our teacher introduced the "supply-and-demand curve" graph, the basic model of how a market behaves. We learned how the three basic principles of economics cause the graph to shift. The first basic principle, for example, that people are rational, refers to the fact that they base their decisions on their perception of the benefits and costs of their choices. Therefore, their positive or negative perception of a particular good can affect the demand for that good. As the week progressed, we tackled a more complicated model: the international market. We learned how the model of a closed market-one that does not interact with other markets and is itself sustainable-changes when it begins to interact with other market economies. We saw how world prices and tariffs-excise taxes that governments place on imported goods in order to increase the value of their own domestic products-affect supply and demand.

Table of Contents for the Digital Edition of Imagine Magazine - Johns Hopkins - November/December 2013

In My Own Words
Interested in Econ
The World in Numbers
Reckoning with Randomness
Elliptic Curves
A League of Our Own
More Than Math
Developing Your Numbersense
Where Math Meets Imagination
Selected Opportunities & Resources
Dancing in the Footsteps of My Ancestors
Off the Shelf
Word Wise
Exploring Career Options
Planning Ahead for College
Students Review
Mark Your Calendar
Knossos Game

Imagine Magazine - Johns Hopkins - November/December 2013