Ch01-The Fundamentals of Economics-20120227-moring 0526.pptVIP

Our climbing is beginning now!Challenge yourself! Course: Microeconomics Instructor: Leon (leonzuo000@163.com) scarcity Utopia doesn’t exist! Ours is a world of scarcity, full of economics goods. Give unlimited wants, it is important that an economy make the best use of its limited resources. That brings us to the critical notion of efficiency. Efficiency denotes the most effective use of a society’s resources in satisfying people’s wants and needs. The essence of economics is to acknowledge the reality of scarcity and then figure out how to organize society in a way which produces the most efficient use of resources. P or N ? 1.What is the impact of computers on productivity? 2.Why do doctors earn more than janitors? 3.Should poor people be required to work if they are to get government assistance? 4.Should the United States break up Microsoft because it has violated the antitrust laws? P or N ? 1.China’s growth rate of economy in the last year is about 9%. 2.Our central government should raise the minimum wage (最低工资). What is the difference between USA and the former USSR (Union of Soviet Socialist Republics) about economic system? Market Economy VS Command Economy Market economy: A system of prices, of markets, of profits and losses, of incentives and rewards determines what, how and for whom. Firms produce the commodities that yield the highest profits (the what) by the techniques of production that are least costly (the how). Consumption is determined by individuals’ decisions about how to spend the wages and property incomes generated by their labor and property ownership (the for whom). Behind the shift of PPF Why does the PPF shift outside? CASE：第一个五年计划 与PPF “一五”计划，是指我国从1953年到1957年发展国民经济的计划。 “一五”计划所确定的基本任务是：集中主要力量进行以苏联帮助我国设计的156个建设项目为中心、由694个大中型建设项目组成的工业建设，建立我国的社会主义工业化的初步基础。 1957年底“一五”计划胜利完成，使我国建立起社会主义工业化的初步基础。社会主义生产关系基本确定。 Second best choice of OC Opportunity cost is the cost of any activity measured in terms of the value of the next best al