micr lecture1.pptVIP

Microeconomics by Hualin PU Lecture 01: What is economics about? Ten Principles of Economics Thinking Like an Economist Decomposition of scores Attendance + In-class performance (2%x5=10%) + Exercises (3%x5=15%)+ Quizzes (7.5%x2=15%)+ Final Exam (60%) = Total Score Website for MC in the final exam /cgi-wadsworth/course_products_wp.pl?fid=M20bflag=studentproduct_isbn_issn=9780324224726discipline_number=413 Principle #1: People Face Tradeoffs. “There is no such thing as a free lunch!” Principle #1: People Face Tradeoffs. To get one thing, we usually have to give up another thing. Guns v. butter Food v. clothing Leisure time v. work Efficiency v. equity Case 1-1 Principle #1 People Face Tradeoffs Andrew is a senior student of International School , JNU. This July, he is going to graduate from JNU. So far, he has got three offers: one is offered by the Ministry of Foreign Affairs; a second one is offered by a famous accounting firm----Ernst Young; and a third is offered by a commercial bank----the Chartered Bank. Q: What is the tradeoff in this case? Principle #2: The Cost of Something Is What You Give Up to Get It. Decisions require comparing costs and benefits of alternatives. Whether to go to college or to work? Whether to study or go out on a date? Whether to go to class or sleep in? The opportunity cost of an item is what you give up to obtain that item. Principle #2: The Cost of Something Is What You Give Up to Get It. LA Laker basketball star Kobe Bryant chose to skip college and go straight from high school to the pros where he has earned millions of dollars. Case 1-2 The Cost of Something Is What You Give Up to Get It----Opportunity Cost Miss Wang Yue graduated from the College of Journalism, JNU in 2001 and was employed as a reporter by Guangzhou Daily. Her monthly salary was above RMB 4,000. In 2004, Wang Yue quitted her job and applied for a master’s degree (MA) but failed. In 2005, Wang Yue did not find new job and stayed at home to prepare