成果經(jīng)濟學(xué)初微princ

1、Ten Principles of EconomicsEconomicsP R I N C I P L E S O FN. Gregory Mankiw1課程簡介教材：Principles of Economics, 4ed. written by N. Gregory Mankiw參考書：經(jīng)濟學(xué)原理學(xué)習(xí)指南，大衛(wèi)哈克斯著，梁小民譯，北京大學(xué)出版社課外閱讀：經(jīng)濟學(xué)的思維方式，保羅海恩著，馬昕譯，世界圖書出版公司任課教師：祁紅濤聯(lián)系方式： 0In this chapter, look for the answers to these questions:What kinds of questio

2、ns does economics address?What are the principles of how people make decisions? What are the principles of how people interact?What are the principles of how the economy as a whole works? 2TEN PRINCIPLES OF ECONOMICS3What Economics Is All AboutScarcity（稀缺性）: the limited nature of societys resourcesE

3、conomics: the study of how society manages its scarce resources, e.g.how people decide what to buy, how much to work, save, and spendhow firms decide how much to produce, how many workers to hirehow society decides how to divide its resources between national defense, consumer goods, protecting the

4、environment, and other needs00The principles of HOW PEOPLE MAKE DECISIONSTEN PRINCIPLES OF ECONOMICS5HOW PEOPLE MAKE DECISIONSAll decisions involve tradeoffs. Examples:Going to a party the night before your midterm leaves less time for studying.Having more money to buy stuff requires working longer

5、hours, which leaves less time for leisure.More nation defense requires resources that could otherwise be used to produce consumer goods. (guns or butter?)Principle #1: People Face Tradeoffs0TEN PRINCIPLES OF ECONOMICS6HOW PEOPLE MAKE DECISIONSSociety faces an important tradeoff: efficiency vs. equal

6、ity Efficiency: when society gets the most from its scarce resourcesEquality: when prosperity is distributed uniformly among societys membersTradeoff: To achieve greater equality, e could be redistributed from wealthy to poor. But this reduces incentive to work and produce, shrinks the size of the e

7、conomic “pie.” Principle #1: People Face Tradeoffs0TEN PRINCIPLES OF ECONOMICS7HOW PEOPLE MAKE DECISIONSMaking decisions requires comparing the costs and benefits of alternative choices. The opportunity cost of any item is whatever must be given up to obtain it. It is the relevant cost for decision

8、making.Principle #2: The Cost of Something Is What You Give Up to Get ItTEN PRINCIPLES OF ECONOMICS8HOW PEOPLE MAKE DECISIONSExamples: What is the opportunity cost of going to college for a year? The spend on tuition, books, room and board? The spend on room and board may be not. The time that is sp

9、ent must be.Principle #2: The Cost of Something Is What You Give Up to Get ItTEN PRINCIPLES OF ECONOMICS9HOW PEOPLE MAKE DECISIONSRational people systematically and purposefully do the best they can to achieve their objectives.make decisions by evaluating costs and benefits of marginal changes incre

10、mental adjustments to an existing plan. Principle #3: Rational People Think at the MarginTEN PRINCIPLES OF ECONOMICS10HOW PEOPLE MAKE DECISIONSExamples:When a student considers whether to go to college for an additional year, he compares the fees & foregone wages to the extra e he could earn with th

11、e extra year of education.When a manager considers whether to increase output, she compares the cost of the needed labor and materials to the extra revenue. Principle #3: Rational People Think at the MarginYou are selling your 1996 Mustang. You have already spent $1000 on repairs. At the last minute

12、, the transmission dies. You can pay $600 to have it repaired, or sell the car “as is.” In each of the following scenarios, should you have the transmission repaired? Explain.A.Blue book value is $6500 if transmission works, $5700 if it doesntB.Blue book value is $6000 if transmission works, $5500 i

13、f it doesntA C T I V E L E A R N I N G 1 Applying the principles11Cost of fixing transmission = $600A.Blue book value is $6500 if transmission works, $5700 if it doesntBenefit of fixing the transmission = $800($6500 5700). Its worthwhile to have the transmission fixed. B.Blue book value is $6000 if

14、transmission works, $5500 if it doesntBenefit of fixing the transmission is only $500.Paying $600 to fix transmission is not worthwhile.A C T I V E L E A R N I N G 1 Answers12TEN PRINCIPLES OF ECONOMICS13HOW PEOPLE MAKE DECISIONSIncentive: something that induces a person to act, i.e. the prospect of

15、 a reward or punishment. Rational people respond to incentives.Examples:When gas prices rise, consumers buy more hybrid cars and fewer gas guzzling SUVs.When cigarette taxes increase, teen smoking falls. Principle #4: People Respond to Incentives0The principles of HOW PEOPLE INTERACTTEN PRINCIPLES O

16、F ECONOMICS15HOW PEOPLE INTERACTWealth: The things that is valuable.The core of economy is to create “wealth”, but not “matter”Trade could induce the wealth to increase even the matter is constant, which is the same of productPrinciple #5: Trade Can Make Everyone Better OffTEN PRINCIPLES OF ECONOMIC

17、S16HOW PEOPLE INTERACTTrade could move goods to the ones who need them mostly, and the value of goods increase consequently.Rather than being self-sufficient, people can specialize in producing one good or service and exchange it for other goods. Principle #5: Trade Can Make Everyone Better OffTEN P

18、RINCIPLES OF ECONOMICS17HOW PEOPLE INTERACTCountries also benefit from trade & specialization:Access to a greater variety of goods Get a better price abroad for goods they produceBuy other goods more cheaply from abroad than could be produced at homePrinciple #5: Trade Can Make Everyone Better OffTE

19、N PRINCIPLES OF ECONOMICS18HOW PEOPLE INTERACTMarket: a group of buyers and sellers (need not be in a single location)“Organize economic activity” means determining what goods to produce how to produce them how much of each to producewho gets themPrinciple #6: Markets Are Usually A Good Way to Organ

20、ize Economic ActivityTEN PRINCIPLES OF ECONOMICS19HOW PEOPLE INTERACTA market economy allocates resources through the decentralized decisionsNo government committee that makes the decisionsEach of many households decides who to work for and what goods to buy. Each of many firms decides whom to hire

21、and what goods to produce. Principle #6: Markets Are Usually A Good Way to Organize Economic ActivityTEN PRINCIPLES OF ECONOMICS20HOW PEOPLE INTERACTThe invisible hand works through the price system:The interaction of buyers and sellers determines prices. Each price reflects the goods value to buyer

22、s and the cost of producing the good. Prices guide self-interested households and firms to make decisions that, in many cases, maximize societys economic well-being. Principle #6: Markets Are Usually A Good Way to Organize Economic ActivityTEN PRINCIPLES OF ECONOMICS21HOW PEOPLE INTERACTImportant ro

23、le for governments: enforce property rights(with police, courts)Property rights is the base of market economyPeople are less inclined to work, produce, invest, or purchase if large risk of their property being stolen. Principle #7: Governments Can Sometimes Improve Market esTEN PRINCIPLES OF ECONOMI

24、CS22HOW PEOPLE INTERACTMarket failure: when the market fails to allocate societys resources efficientlyExternalities, when the production or consumption of a good affects bystanders (e.g. pollution)Market power, a single buyer or seller has substantial influence on market price (e.g. monopoly)Asymme

25、tric information, some one doesnt have the necessary information to make decisionIn such cases, public policy may promote efficiency.Principle #7: Governments Can Sometimes Improve Market esTEN PRINCIPLES OF ECONOMICS23HOW PEOPLE INTERACTgovernments may alter market e to promote equityIf the markets

26、 distribution of economic well-being is not desirable, tax or welfare policies can change how the economic “pie” is divided. Principle #7: Governments Can Sometimes Improve Market esIn each of the following situations, what is the governments role? Does the governments intervention improve the e?a.P

27、ublic schoolsb.Workplace safety regulationsc.Public highwaysd.Patent laws, which allow drug companies to charge high prices for life-saving drugsA C T I V E L E A R N I N G 2 Discussion Questions240The principles of HOW THE ECONOMY AS A WHOLE WORKSTEN PRINCIPLES OF ECONOMICS26HOW THE ECONOMY AS A WH

28、OLE WORKSHuge variation in living standards across countries and over time:Average e in rich countries is more than ten times average e in poor countries. The U.S. standard of living today is about eight times larger than 100 years ago.Principle #8: A countrys standard of living depends on its abili

29、ty to produce goods & services. TEN PRINCIPLES OF ECONOMICS27HOW THE ECONOMY AS A WHOLE WORKSThe most important determinant of living standards: productivity, the amount of goods and services produced per unit of labor. Productivity depends on the equipment, skills, and technology available to worke

30、rs.Other factors (e.g., labor unions, competition from abroad) have far less impact on living standards.Principle #8: A countrys standard of living depends on its ability to produce goods & services. TEN PRINCIPLES OF ECONOMICS28HOW THE ECONOMY AS A WHOLE WORKSInflation: increases in the general lev

31、el of prices. In the long run, inflation is almost always caused by excessive growth in the quantity of money, which causes the value of money to fall. The faster the government creates money, the greater the inflation rate. Principle #9: Prices rise when the government prints too much money.TEN PRI

32、NCIPLES OF ECONOMICS29HOW THE ECONOMY AS A WHOLE WORKSIn the short-run (1 2 years), many economic policies push inflation and unemployment in opposite directions. Unemployment: the ones who want and are able to work but are not employed. Other factors can make this tradeoff more or less favorable, but the tradeoff is always present. Principl