hubbard_econ01_ppt_01.pptVIP

Economics:Foundations and Models What Happens When U.S. FirmsMove to China? After studying this chapter, you should be able to: Discuss these three important economic ideas: People are rational. People respond to incentives. Optimal decisions are made at the margin. Discuss how an economy answers these questions: What goods and services will be produced? How will the goods and services be produced? Who will receive the goods and services? Understand the role of models in economic analysis. Distinguish between microeconomics and macroeconomics. Become familiar with important economic terms. Economics: Foundations and Models In this book, we use economics to answer questions such as the following: “How are the prices of goods and services determined?” “How does pollution affect the economy, and how should government policy deal with these effects?” “Why do firms engage in international trade, and how do government policies affect international trade?” “Why does government control the prices of some goods and services, and what are the effects of those controls?” Economics: Foundations and Models Building a Foundation: Economics and Individual Decisions Apple Computer Makes a Decision at the Margin The Economic Problem That Every Society Must Solve The Economic Problem That Every Society Must Solve Centrally Planned Economies versus Market Economies The Modern “Mixed” Economy The Modern “Mixed” Economy Efficiency and Equity Economic Models Economic Models Normative and Positive Analysis Microeconomics and Macroeconomics A Preview of Important Economic Terms The Halo Effect: How China’s Expansion Will Affect Jobs and Growth Elsewhere Allocative efficiency Centrally planned economy Economic model Economic variable Economics Equity Macroeconomics Marginal analysis Market Appendix 1A:Using Graphs and Formulas Appendix 1A:Using Graphs and Formulas Graphs of One Variable Appendix 1A:Using Graphs and Formulas Graphs of One Variable Appendix 1A:Using