[经济学]economics-003.pptVIP

Topics today Margin; Marginal cost; Marginal benefit the Law of Diminishing Marginal Utility PPF: Production Possibility Frontier (Curve) Economic system Review How to understand: The interest is the opportunity cost of the profit; the profit is the opportunity cost of the interest. The Economic Way of Thinking The Economic Way of Thinking Choosing at the Margin People make choices at the margin, which means that they evaluate the consequences of making incremental changes in the use of their resources. The benefit from pursuing an incremental increase in an activity is its marginal benefit. The cost of pursuing an incremental increase in an activity is its marginal cost. The Economic Way of Thinking Decisions in life are rarely black and white but usually involve shades of gray. When it’s time for dinner, the decision you face is not between fasting or eating like a pig, but whether to take that extra spoonful of mashed potatoes. When exams roll around, your decision is not between blowing them off or studying 24 hours a day, but whether to spend an extra hour reviewing your notes instead of watching TV. The Economic Way of Thinking Economists use the term marginal changes to describe small incremental adjustments to an existing plan of action. Keep in mind that “margin” means “edge,” so marginal changes are adjustments around the edges of what you are doing. The Economic Way of Thinking As another example, consider an airline deciding how much to charge passengers who fly standby. Suppose that flying a 200-seat plane across the country costs the airline $100,000. In this case, the average cost of each seat is $100,000/200, which is $500. …… The Economic Way of Thinking Although the average cost of flying a passenger is $500, the marginal cost is merely the cost of the bag of peanuts and can of soda that the extra passenger will consume. Apple Computer Makes a Decision at the Margin The Economic Way of Thinking Utility cannot be measured b