微观经济学英语

,N.GregoryMankiw,Inthischapter,lookfortheanswerstothesequestions:,Whatkindsofquestionsdoeseconomicsaddress?Whataretheprinciplesofhowpeoplemakedecisions?Whataretheprinciplesofhowpeopleinteract?Whataretheprinciplesofhowtheeconomyasawholeworks?,WhatEconomicsIsAllAbout,Scarcity:thelimitednatureofsocietysresourcesEconomics:thestudyofhowsocietymanagesitsscarceresources,e.g.howpeopledecidewhattobuy,howmuchtowork,save,andspendhowfirmsdecidehowmuchtoproduce,howmanyworkerstohirehowsocietydecideshowtodivideitsresourcesbetweennationaldefense,consumergoods,protectingtheenvironment,andotherneeds,0,0,TheprinciplesofHOWPEOPLEMAKEDECISIONS,PRINCIPLE#1:PeopleFaceTradeoffs,Alldecisionsinvolvetradeoffs.Examples:Goingtoapartythenightbeforeyourmidtermleaveslesstimeforstudying.Havingmoremoneytobuystuffrequiresworkinglongerhours,whichleaveslesstimeforleisure.Protectingtheenvironmentrequiresresourcesthatcouldotherwisebeusedtoproduceconsumergoods.,0,PRINCIPLE#1:PeopleFaceTradeoffs,Societyfacesanimportanttradeoff:efficiencyvs.equalityEfficiency:whensocietygetsthemostfromitsscarceresourcesEquality:whenprosperityisdistributeduniformlyamongsocietysmembersTradeoff:Toachievegreaterequality,couldredistributeincomefromwealthytopoor.Butthisreducesincentivetoworkandproduce,shrinksthesizeoftheeconomic“pie.”,0,PRINCIPLE#2:TheCostofSomethingIsWhatYouGiveUptoGetIt,Makingdecisionsrequirescomparingthecostsandbenefitsofalternativechoices.Theopportunitycostofanyitemiswhatevermustbegivenuptoobtainit.Itistherelevantcostfordecisionmaking.,PRINCIPLE#2:TheCostofSomethingIsWhatYouGiveUptoGetIt,Examples:Theopportunitycostofgoingtocollegeforayearisnotjustthetuition,books,andfees,butalsotheforegonewages.seeingamovieisnotjustthepriceoftheticket,butthevalueofthetimeyouspendinthetheater.,PRINCIPLE#3:RationalPeopleThinkattheMargin,Rationalpeoplesystematicallyandpurposefullydothebesttheycantoachievetheirobjectives.makedecisionsbyevaluatingcostsandbenefitsofmarginalchanges,incrementaladjustmentstoanexistingplan.,PRINCIPLE#3:RationalPeopleThinkattheMargin,Examples:Whenastudentconsiderswhethertogotocollegeforanadditionalyear,hecomparesthefees&foregonewagestotheextraincomehecouldearnwiththeextrayearofeducation.Whenamanagerconsiderswhethertoincreaseoutput,shecomparesthecostoftheneededlaborandmaterialstotheextrarevenue.,PRINCIPLE#4:PeopleRespondtoIncentives,Incentive:somethingthatinducesapersontoact,i.e.theprospectofarewardorpunishment.Rationalpeoplerespondtoincentives.Examples:Whengaspricesrise,consumersbuymorehybridcarsandfewergasguzzlingSUVs.Whencigarettetaxesincrease,teensmokingfalls.,ACTIVELEARNING1Applyingtheprinciples,Youaresellingyour1996Mustang.Youhavealreadyspent$1000onrepairs.Atthelastminute,thetransmissiondies.Youcanpay$600tohaveitrepaired,orsellthecar“asis.”Ineachofthefollowingscenarios,shouldyouhavethetransmissionrepaired?Explain.A.Bluebookvalue(whatyoucouldgetforthecar)is$6500iftransmissionworks,$5700ifitdoesntB.Bluebookvalueis$6000iftransmissionworks,$5500ifitdoesnt,2014CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.,ACTIVELEARNING1Answers,Costoffixingtransmission=$600A.Bluebookvalueis$6500iftransmissionworks,$5700ifitdoesntBenefitoffixingthetransmission=$800($65005700).Itsworthwhiletohavethetransmissionfixed.B.Bluebookvalueis$6000iftransmissionworks,$5500ifitdoesntBenefitoffixingthetransmissionisonly$500.Paying$600tofixtransmissionisnotworthwhile.,2014CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.,ACTIVELEARNING1Observations,The$1000youpreviouslyspentonrepairsisirrelevant.Whatmattersisthecostandbenefitofthemarginalrepair(thetransmission).ThechangeinincentivesfromscenarioAtoscenarioBcausedyourdecisiontochange.,2014CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.,0,TheprinciplesofHOWPEOPLEINTERACT,PRINCIPLE#5:TradeCanMakeEveryoneBetterOff,Ratherthanbeingself-sufficient,peoplecanspecializeinproducingonegoodorserviceandexchangeitforothergoods.Countriesalsobenefitfromtradeandspecialization:GetabetterpriceabroadforgoodstheyproduceBuyothergoodsmorecheaplyfromabroadthancouldbeproducedathome,PRINCIPLE#6:MarketsAreUsuallyAGoodWaytoOrganizeEconomicActivity,Market:agroupofbuyersandsellers(neednotbeinasinglelocation)“Organizeeconomicactivity”meansdeterminingwhatgoodstoproducehowtoproducethemhowmuchofeachtoproducewhogetsthem,PRINCIPLE#6:MarketsAreUsuallyAGoodWaytoOrganizeEconomicActivity,Amarketeconomyallocatesresourcesthroughthedecentralizeddecisionsofmanyhouseholdsandfirmsastheyinteractinmarkets.FamousinsightbyAdamSmithinTheWealthofNations(1776):Eachofthesehouseholdsandfirmsactsasif“ledbyaninvisiblehand”topromotegeneraleconomicwell-being.,PRINCIPLE#6:MarketsAreUsuallyAGoodWaytoOrganizeEconomicActivity,Theinvisiblehandworksthroughthepricesystem:Theinteractionofbuyersandsellersdeterminesprices.Eachpricereflectsthegoodsvaluetobuyersandthecostofproducingthegood.Pricesguideself-interestedhouseholdsandfirmstomakedecisionsthat,inmanycases,maximizesocietyseconomicwell-being.,PRINCIPLE#7:GovernmentsCanSometimesImproveMarketOutcomes,Importantroleforgovt:enforcepropertyrights(withpolice,courts)Peoplearelessinclinedtowork,produce,invest,orpurchaseiflargeriskoftheirpropertybeingstolen.,PRINCIPLE#7:GovernmentsCanSometimesImproveMarketOutcomes,Marketfailure:whenthemarketfailstoallocatesocietysresourcesefficientlyCausesofmarketfailure:Externalities,whentheproductionorconsumptionofagoodaffectsbystanders(e.g.pollution)Marketpower,asinglebuyerorsellerhassubstantialinfluenceonmarketprice(e.g.monopoly)Publicpolicymaypromoteefficiency.,PRINCIPLE#7:GovernmentsCanSometimesImproveMarketOutcomes,Govtmayaltermarketoutcometopromoteequity.Ifthemarketsdistributionofeconomicwell-beingisnotdesirable,taxorwelfarepoliciescanchangehowtheeconomic“pie”isdivided.,ACTIVELEARNING2DiscussionQuestion,Ineachofthefollowingsituations,whatisthegovernmentsrole?Doesthegovernmentsinterventionimprovetheoutcome?a.PublicschoolsforK-12b.Workplacesafetyregulationsc.Publichighwaysd.Patentlaws,whichallowdrugcompaniestochargehighpricesforlife-savingdrugs,2014CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.,0,TheprinciplesofHOWTHEECONOMYASAWHOLEWORKS,PRINCIPLE#8:ACountrysStandardofLivingDependsonItsAbilitytoProduceGoods&Services,Hugevariationinlivingstandardsacrosscountriesandovertime:Averageincomeinrichcountriesismorethantentimesaverageincomeinpoorcountries.TheU.S.standardoflivingtodayisabouteighttimeslargerthan100yearsago.,PRINCIPLE#8:ACountrysStandardofLivingDependsonItsAbilitytoProduceGoods&Services,Themostimportantdeterminantoflivingstandards:productivity,theamountofgoodsandservicesproducedperunitoflabor.Productivitydependsontheequipment,skills,andtechnologyavailabletoworkers.Otherfactors(e.g.,laborunions,competitionfromabroad)havefarlessimpactonlivingstandards.,PRINCIPLE#9:PricesRiseWhentheGovernmentPrintsTooMuchMoney,Inflation:increasesinthegenerallevelofprices.Inthelongrun,inflationisalmostalwayscausedbyexcessivegrowthinthequantityofmoney,whichcausesthevalueofmoneytofall.Thefasterthegovtcreatesmoney,thegreatertheinflationrate.,PRINCIPLE#10:SocietyFacesaShort-runTradeoffBetweenInflationandUnemployment,Intheshort-run(12years),manyeconomicpoliciespushinflationandunemploymentinoppositedirections.Otherfactorscanmakethistradeoffmoreorlessfavorable,butthetradeoffisalwayspresent.,FYI:HowtoReadYourTextbook,1.Readbeforeclass.Youllgetmoreoutofclass.2.Summarize,donthighlight.Highlightingisapassiveactivitythatwontimproveyourcomprehensionorretention.Instead,summarizeeachsectioninyourownwords.Then,compareyoursummarytotheoneattheendofthechapter.,FYI:HowtoReadYourTextbook,3.Testyourself.Trythe“QuickQuiz”thatfollowseachsectionbeforemovingontothenextsection.Writeyouranswersdown,comparethemtotheanswersinthebackofthebook.Ifyouranswersareincorrect,reviewthesectionbeforemovingon.4.Practice,practice,practice.Workthroughtheend-of-chapterreviewquestionsandproblems.Theyareoftengoodpracticefortheexams.Andthemoreyouuseyournewknowledge,themoresoliditwillbecome.,FYI:HowtoReadYourTextbook,5.Goonline.Thebookcomeswithexcellentwebresources,includingpracticequizzes,toolstostrengthenyourgraphingskills,helpfulvideoclips,andotherresourcestohelpyoulearnthetextbookmaterialmoreeasilyandeffectively.Visit:Studyingroups.Gettogetherwithafewclassmatestorevieweachchapter,quizeachother,andhelpeachotherunderstandthematerial.,FYI:HowtoReadYourTextbook,7.Teachsomeone.Thebestwaytolearnsomethingistoteachittosomeoneelse,suchasastudypartnerorfriend.8.Dontskiptherealworldexamples.ReadtheCaseStudiesand“InTheNews”boxesineachchapter.Theywillhelpyouseehowthenewterms,concepts,models,andgraphsapplytotherealworld.Asyoureadthenewspaperorwatchtheeveningnews,seeifyoucanfindtheconnectionswithwhatyourelearninginthetextbook.,SUMMARY,Theprinciplesofdecisionmakingare:Peoplefacetradeoffs.Thecostofanyactionismeasuredintermsofforegoneopportunities.Rationalpeoplemakedecisionsbycomparingmarginalcostsandmarginalbenefits.Peoplerespondtoincentives.,2014CengageLearnin