The Economic Perspective - MDC Faculty Home Pages - Miami 经济角度——MDC学院主页-迈阿密.pptVIP

The Economic Perspective Chapter 1 Economic Problem The problem is that, although your wants, or desires, are virtually unlimited, the resources available to satisfy these wants are scarce. Scarcity Scarcity Means limited goods and services Restricts options and demands choices Price ZERO Rational Self-Interest Means that individuals try to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit Making decisions at the margin Margin: the cutoff point; decision making at the margin refers to deciding on one more or one less of something Weighing and balancing of alternatives Marginal benefit Marginal cost Benefits Costs Scientific Method Elements Observation of real-world behavior and outcomes Formulation of hypothesis Testing of this explanation by comparing the outcomes of specific events to predict outcome The acceptance, rejection, or modification of the hypothesis The continued testing of the hypothesis against the facts. Microeconomics Analyzes the individual components of the economy, such as the choices made by people, firms, and industries. Markets – make possible the voluntary exchange of resources, goods and services; can take physical, electronic, and other forms. Market prices – serve as signals that guide the allocation of resources Macroeconomics Analyzes economic aggregates such as aggregate employment, output, growth, and inflation Most important is GDP Gross domestic product Normative Economics A statement that represents an opinion, which cannot be proved or disproved What ought to be Ethical value judgments Positive Economics A statement that can be proved or disproved by reference to facts What is Scientific portion Society’s Economizing Problem The need to make choices because economic wants exceed economic means Scarce resources Society has limited economic resources Resources The inputs, or factors of production, used to produce the goods and services that people want resour