曼昆经济学原理-第一章ppt

©2009South-Western,apartofCengageLearning,allrightsreservedCHAPTERTenPrinciplesofEconomicsEconomicsPRINCIPLESOFN.GregoryMankiwPremiumPowerPointSlidesbyRonCronovich1Inthischapter,lookfortheanswerstothesequestions:Whatkindsofquestionsdoeseconomicsaddress?Whataretheprinciplesofhowpeoplemakedecisions?Whataretheprinciplesofhowpeopleinteract?Whataretheprinciplesofhowtheeconomyasawholeworks?1TENPRINCIPLESOFECONOMICS2WhatEconomicsIsAllAboutScarcity:thelimitednatureofsociety’sresourcesEconomics:thestudyofhowsocietymanagesitsscarceresources,e.g.howpeopledecidewhattobuy,howmuchtowork,save,andspendhowfirmsdecidehowmuchtoproduce,howmanyworkerstohirehowsocietydecideshowtodivideitsresourcesbetweennationaldefense,consumergoods,protectingtheenvironment,andotherneedsTheprinciplesofHOWPEOPLEMAKEDECISIONSTENPRINCIPLESOFECONOMICS4HOWPEOPLEMAKEDECISIONSAlldecisionsinvolvetradeoffs.Examples:Goingtoapartythenightbeforeyourmidtermleaveslesstimeforstudying.Havingmoremoneytobuystuffrequiresworkinglongerhours,whichleaveslesstimeforleisure.Protectingtheenvironmentrequiresresourcesthatcouldotherwisebeusedtoproduceconsumergoods.Principle#1:PeopleFaceTradeoffsTENPRINCIPLESOFECONOMICS5HOWPEOPLEMAKEDECISIONSSocietyfacesanimportanttradeoff:efficiencyvs.equalityEfficiency:whensocietygetsthemostfromitsscarceresourcesEquality:whenprosperityisdistributeduniformlyamongsociety’smembersTradeoff:Toachievegreaterequality,couldredistributeincomefromwealthytopoor.Butthisreducesincentivetoworkandproduce,shrinksthesizeoftheeconomic“pie.”Principle#1:PeopleFaceTradeoffsTENPRINCIPLESOFECONOMICS6HOWPEOPLEMAKEDECISIONSMakingdecisionsrequirescomparingthecostsandbenefitsofalternativechoices.Theopportunitycostofanyitemiswhatevermustbegivenuptoobtainit.Itistherelevantcostfordecisionmaking.Principle#2:TheCostofSomethingIsWhatYouGiveUptoGetItTENPRINCIPLESOFECONOMICS7HOWPEOPLEMAKEDECISIONSExamples:Theopportunitycostof……goingtocollegeforayearisnotjustthetuition,books,andfees,butalsotheforegonewages.…seeingamovieisnotjustthepriceoftheticket,butthevalueofthetimeyouspendinthetheater.Principle#2:TheCostofSomethingIsWhatYouGiveUptoGetItTENPRINCIPLESOFECONOMICS8HOWPEOPLEMAKEDECISIONSRationalpeoplesystematicallyandpurposefullydothebesttheycantoachievetheirobjectives.makedecisionsbyevaluatingcostsandbenefitsofmarginalchanges–incrementaladjustmentstoanexistingplan.Principle#3:RationalPeopleThinkattheMarginTENPRINCIPLESOFECONOMICS9HOWPEOPLEMAKEDECISIONSExamples:Whenastudentconsiderswhethertogotocollegeforanadditionalyear,hecomparesthefees&foregonewagestotheextraincomehecouldearnwiththeextrayearofeducation.Whenamanagerconsiderswhethertoincreaseoutput,shecomparesthecostoftheneededlaborandmaterialstotheextrarevenue.Principle#3:RationalPeopleThinkattheMarginTENPRINCIPLESOFECONOMICS10HOWPEOPLEMAKEDECISIONSIncentive:somethingthatinducesapersontoact,i.e.theprospectofarewardorpunishment.Rationalpeoplerespondtoincentives.Examples:Whengaspricesrise,consumersbuymorehybridcarsandfewergasguzzlingSUVs.Whencigarettetaxesincrease,teensmokingfalls.Principle#4:PeopleRespondtoIncentivesYouaresellingyour1996Mustang.Youhavealreadyspent$1000onrepairs.Atthelastminute,thetransmissiondies.Youcanpay$600tohaveitrepaired,orsellthecar“asis.”Ineachofthefollowingscenarios,shouldyouhavethetransmissionrepaired?Explain.A.Bluebookvalueis$6500iftransmissionworks,$5700ifitdoesn’tB.Bluebookvalueis$6000iftransmissionworks,$5500ifitdoesn’tACTIVELEARNING1Applyingtheprinciples11Costoffixingtransmission=$600A.Bluebookvalueis$6500iftransmissionworks,$5700ifitdoesn’tBenefitoffixingthetransmission=$800($6500–5700).It’sworthwhiletohavethetransmissionfixed.B.Bluebookvalueis$6000iftransmissionworks,$5500ifitdoesn’tBenefitoffixingthetransmissionisonly$500.Paying$600tofixtransmissionisnotworthwhile.ACTIVELEARNING1Answers12Observations:The$1000youpreviouslyspentonrepairsisirrelevant.Whatmattersisthecostandbenefitofthemarginalrepair(thetransmission).ThechangeinincentivesfromscenarioAtoscenarioBcausedyourdecisiontochange.ACTIVELEARNING1Answers13TheprinciplesofHOWPEOPLEINTERACTTENPRINCIPLESOFECONOMICS15HOWPEOPLEINTERACTRatherthanbeingself-sufficient,peoplecanspecializeinproducingonegoodorserviceandexchangeitforothergoods.Countriesalsobenefitfromtrade&specialization:GetabetterpriceabroadforgoodstheyproduceBuyothergoodsmorecheaplyfromabroadthancouldbeproducedathomePrinciple#5:TradeCanMakeEveryoneBetterOffTENPRINCIPLESOFECONOMICS16HOWPEOPLEINTERACTMarket:agroupofbuyersandsellers(neednotbeinasinglelocation)“Organizeeconomicactivity”meansdeterminingwhatgoodstoproducehowtoproducethemhowmuchofeachtoproducewhogetsthemPrinciple#6:MarketsAreUsuallyAGoodWaytoOrganizeEconomicActivityTENPRINCIPLESOFECONOMICS17HOWPEOPLEINTERACTAmarketeconomyallocatesresourcesthroughthedecentralizeddecisionsofmanyhouseholdsandfirmsastheyinteractinmarkets.FamousinsightbyAdamSmithinTheWealthofNations(1776):Eachofthesehouseholdsandfirmsactsasif“ledbyaninvisiblehand”topromotegeneraleconomicwell-being.Principle#6:MarketsAreUsu