1 what is economics.pptVIP

Chapter 1 what is economics 1-1 What economists study 1-2 How economists think 1-3 How markets work 1-1 What economists study By the end of this section, you should understand That economics is the study of scarcity How opportunity cost reflects scarcity How society rations scarce goods and services Pros and cons of relying on the market Positive and normative economics Microeconomics and macroeconomics What is economics (经济学)? Economics is the study of how society decides what, how, and for whom to produce. Economics is the study of scarcity. When something is so abundantly（丰富的） available that we get all we want , we don’t waste time worrying about what, how, and for whom it should be produced. In the Sahara, there is no need to worry about the production of sand. Scarcity （匮乏，不足） and opportunity cost For a scarce resource, the quantity demanded（需求） at a zero price would exceed（超过） the available supply（供应）. when resources are scarce, society can get more of some things only by having less of other things. We must choose between different outcomes, or make trade-offs（平衡） between them. The opportunity cost（机会成本） of a good is the quantity of other goods sacrificed（牺牲） to get another unit（单位） of this good. As a country, we can have more education only if we have less of something else, perhaps less defense or less food. Government may make these tough choice, but markets also play a role. The role of the market A market uses prices to reconcile（调解） decisions about consumption and production. E.g. during the British beef crisis, caused by fears（恐惧） about mad cow disease（疯牛病）, pork（猪肉） prices rose 30 percent while beef prices fell. This provided the incentive（动机） to expand（扩大） pig farming, and stopped too many shoppers switching to pork until the new piglets（小猪） were ready for market. How might resources be allocated if markets did not exit? In a command economy（指令性（中央管制）经济, government planners decide what, how, and for w