Want to know about Economics
The study of how individuals and societies make decisions about scarce resources.
What is economics?
McGhee uses this metaphor from a 1950s public pool closure to illustrate how racism hurts everyone
What is the drained pool? (Bonus: Montgomery, Alabama pools were filled with dirt rather than integrated)
This represents the central value in a dataset
What is the mean/average?
This represents the likelihood of an event occurring
What is probability?
A measure of how much additional revenue is generated from one more unit of production
What is marginal revenue?
This chapter 1 concept describes the false belief that helping one group must come at another group's expense
What is zero-sum thinking or zero-sum paradigm? (Bonus: McGhee argues this mentality creates lose-lose outcomes)
This test helps determine if there's a significant difference between two population means
What is a t-test?
Question: This theorem relates conditional and marginal probabilities of events
What is Bayes' Theorem?
The principle that states additional consumption of a good provides decreasing amounts of utility
What is the law of diminishing marginal utility?
McGhee uses this state's story to show how racism in higher education hurt both Black and white students by reducing public funding
What is Georgia? (Bonus: The state's HOPE scholarship became less generous for all students after integration demands)
This type of error occurs when we incorrectly reject a true null hypothesis
What is Type I error or alpha error?
These two events cannot occur simultaneously
What are mutually exclusive events?
The situation where one party has more information than another in an economic transaction
What is information asymmetry?
These TWO key economic areas in Chapter 3 show how racial discrimination in lending hurt the entire American economy
What are housing segregation and predatory lending? (Bonus: The 2008 financial crisis exemplified this widespread harm)
This sampling method ensures that each stratum of a population is properly represented
What is stratified random sampling?
This type of probability distribution is characterized by two parameters: n and p
What is the binomial distribution?
The mathematical representation of a consumer's preferences over a set of goods and services
What is a utility function?
McGhee describes this economic term as the potential gain when people unite across racial lines to demand better conditions for all
What is the Solidarity Dividend? (Bonus: Example of Richmond, VA's fight for clean air shows this in action)
This multivariate technique is used to reduce the dimensionality of a dataset while preserving its variability
What is Principal Component Analysis (PCA)?
This concept represents the probability of an event given no prior information
What is the prior probability or prior distribution?