Principle of Economics 微观经济学笔记.doc

HOW PEOPLE MAKE DECISIONS #1: People Face Tradeoffs #2: The Cost of Something Is What You Give Up to Get It #3: Rational People Think at the Margin #4: People Respond to Incentives HOW PEOPLE INTERACT #5: Trade Can Make Everyone Better Off #6: Markets Are Usually a Good Way to Organize Economic Activity #7: Governments Can Sometimes Improve Market Outcomes HOW THE ECONOMY AS AWHOLEWORKS #8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services #9: Prices Rise When the Government Prints Too Much Money #10: Society Faces a Short-Run Tradeoff between Inflation and Unemployment PART ONE INTRODUCTION The fundamental lessons about individual decision-making are that people face tradeoffs among alternative goals, that the cost of any action is measured in terms of forgone opportunities, that rational people make decisions by comparing marginal costs and marginal benefits, and that people change their behavior in response to the incentives they face. The fundamental lessons about interactions among people are that trade can be mutually beneficial, that markets are usually a good way of coordinating trade among people, and that the government can potentially improve market outcomes if there is some market failure or if the market outcome is inequitable. The fundamental lessons about the economy as a whole are that productivity is the ultimate source of living standards, that money growth is the ultimate source of inflation, and that society faces a short-run tradeoff between inflation and unemployment. Summary Scarcity Economics Efficiency Equity Opportunity cost Marginal changes Market economy Market failure Externality Market power Productivity Inflation Phillips curve Positive statements Claims that attempt to describe the world as it is Normative statements Claims that attempt to prescribe how the world should be Economists try to address their subject with a scientist’s objectivity. Like all scientists, they make appropriate assumptions