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The "5Es of Economics" are not from
the textbook. I borrowed the concept (with many
modifications) from another textbook many years ago. I
believe it concisely explains the purpose of economics.
Also, it begins to introduce students to the economic way of
thinking. The economic problem that we all face, that all
countries face, that the world faces, is SCARCITY. Economics
is the study of how we can reduce scarcity. What I like
about the 5Es model is that it shows us that there are only
five ways to reduce scarcity. Only five. I call them the
"5Es" of economics.
The "5Es" of Economcs
are:
1. Economic
Growth
2. Allocative Efficiency
3. Productive Efficiency
4. Equity
5. Full Employment
For each of the 5Es:
1. learn the
definition,
2. understand examples, and,
3. most importantly, know how they reduce scarcity and
help to increase society's satisfaction.
This is where you learn that it may
be good when the price of plywood increases greatly as the
result of a hurricane. And why it might be good when
Coca-Cola lays off one fifth of its workforce. Or, that the
price of gasoline may be too low. Really!
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