economics

Chapter1EconomicsTextAI.WhyStudyEconomics？a.Economics:thestudyofhowsocietymanagesitsscarceresources.经济学是在一定经济制度和经济体制条件下，研究如何有效利用可供选择的有限资源，以求人类无限欲望的最大满足.e.g.1)howpeopledecidewhattobuyandhowmuchtowork,saveandspend2)howfirmsdecidehowmuchtoproduceandhowmanyworkerstohire3)howsocietydecidestodivideitsresourcesamongcompetingneedssuchasnationaldefense,consumergoodsandenvironmentalprotectionb.Resource:anythingthatcanbeusedtoproducesomethingelsec.Scarcity:theresourcesavailabletoasocietyfortheproductionofgoodsandservicesarelimitedd.Scarcityprinciple:althoughwehaveboundlessneedsandwants,resourcesavailabletousarelimitedsohavingmoreofonethingusuallymeanslessofanotherII.Thechapterintroducestenprinciplesofeconomicsaspartofthreeissues.Howpeoplemakedecisions(1---4)Howpeopleinteract(5---7)Howtheeconomyasawholeworks(8—10)1.Principle1:Peoplefacetrade-offs.人们面临权衡取舍Alldecisionsinvolvetrade-offs.Examples:a.Goingtoapartythenightbeforeyourmidtermleaveslesstimeforstudying.b.Havingmoremoneytomakepurchasesrequiresworkinglongerhoursandleavinglesstimeforleisure.c.Protectingtheenvironmentrequiresresourcesthatcouldotherwisebeusedtoproduceconsumergoods.Societyfacesanimportanttrade-off:efficiencyversusequalitya.Efficiency:whensocietygetsthemaximumbenefitsfromitsscarceresourcesb.Equality:whenprosperityisdistributeduniformlyamongmembersofsocietyc.Trade-off:toachievegreaterequality,incomecanberedistributedfromwealthytopoorbutthismayreduceincentivetoworkandproduceleadingtoareductioninthesizeoftheeconomic“pie.”2.Principle2:ThecostofsomethingiswhatyougiveuptogetIt某种东西的成本是为了得到它而放弃的东西a.Makingdecisionsrequirescomparingthecostsandbenefitsofalternativechoices.b.Theopportunitycostofanyitemiswhatevermustbegivenuptoobtainit.c.OpportunitycostistherelevantcostfordecisionMakingForexample,theopportunitycostof……goingtocollegeforayearisnotjustthetuition,booksandfeesbutalsotheforegonewages.…seeingamovieisnotjustthepriceoftheticket,butthevalueofthetimeyouspendinthetheater.Arethebestthingsinlifefree?3.Principle3:Rationalpeoplethinkatthemargin理性人考虑边际量Rationalpeoplesystematicallyandpurposefullydothebesttheycantoachievetheirobjectives,makedecisionsbyevaluatingcostsandbenefitsofmarginalchanges–incrementaladjustmentstoanexistingplan.maketrade-offsatthemarginbycomparingthecostsandbenefitsofdoingalittlebitmoreofanactivityversusdoingalittlebitless.Examples:Whenconsideringwhethertogotocollegeforanadditionalyear,astudentcomparesthetuitionfeesandforegonewagestotheextraincomeearnedwithonemoreyearofeducation.Whenamanagerconsiderswhethertoincreaseoutput,shecomparestheadditionalcostofthelaborandmaterialswiththeextrarevenue.4.Principle4:Peoplerespondtoincentives.人们会对激励做出反应a.Incentive:somethingthatinducesapersontoactinacertainwaysuchastheprospectofarewardorpunishment.b.Rationalpeoplerespondtoincentives.Examples:Whengaspricesrise,consumersbuymorehybridcarsandfewergasguzzlingSUVs.Whenthecostofheatingoilgoesup,peopleturndowntheirthermostats.5.Principle5:Tradecanmakeeveryonebetteroff贸易能使每个人的状况更好a.Ratherthanbeingself-sufficient,peoplecanspecializeinproducingonegoodorserviceandexchangeitforothergoodsandservices.b.Countriesalsobenefitfromtradeandspecialization:Getabetterpriceabroadforgoodstheyproduce;Buyothergoodsmorecheaplyfromabroadthancouldbeproducedathomec.Anindividualcanincreaseoutputwithspecialization:eachpersonspecializesinthetaskthatheorsheisgoodatperforming.d.Theeconomy,asawhole,canproducemorewheneachpersonspecializesinataskandtradeswithothers.6.Principle6:Marketsareusuallyagoodwaytoorganizeeconomicactivity.市场通常是组织经济活动的一种好方法a.Market:agroupofbuyersandsellersthatmayormaynotbeinasinglelocationb.“Organizeeconomicactivity”meansdeterminingWhatgoodsandservicestoproduceHowtoproducethemHowmuchofeachtoproduceForwhomthegoodsandservicesareproducedorwhogetswhat.c.Amarketeconomyallocatesresourcesthroughthedecentralizeddecisionsofmanyhouseholdsandfirmsastheyinteractinmarkets.d.AfamousinsightbyAdamSmithinTheWealthofNations(1776)isthateachofthesehouseholdsandfirmsactsasif“ledbyaninvisiblehand”topromotegeneraleconomicwell-beinge.Theinvisiblehandworksthroughthepricesystem:1)Theinteractionofbuyersandsellersdeterminesthepricesofgoodsandservices.2)Eachpricereflectsthevalueoftheproducttobuyersandthecostofproducingtheproducttosellers.3)Pricesguideself-interestedhouseholdsandfirmstomakedecisionsthat,inmanycases,alsomaximizesociety’seconomicwell-being.7.Principle7:Governmentscansometimesimprovemarketoutcomes政府有的时候可以改善市场结果a.Thereisanimportantroleforgovernmenttoenforcepropertyrights,sothatindividualscanownandcontrolscarceresourcesb.Peoplearelessinclinedtowork,produce,investorpurchasewithoutarighttoownership.c.Marketfailure:asituationinwhichthemarketleftonitsownfailstoallocateresourcesefficiently.Causesofmarketfailureare:1)Externalities,whentheproductionorconsumptionofagoodaffectsbystanders(e.g.pollution)2)Marketpower,asinglebuyerorsellerhassubstantialinfluenceonmarketprice(e.g.monopoly)Insuchcases,publicpolicymaypromoteefficiency.d.Thegovernmentmayaltermarketoutcomestopromoteequality.Taxesandtransferscanbe