micro economics chapter 01
Bạn đang xem bản rút gọn của tài liệu. Xem và tải ngay bản đầy đủ của tài liệu tại đây (85.69 KB, 15 trang )
1
Limits, Alternatives, and
Choices
McGraw-Hill/Irwin
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Introduction
•
LO1
Economics defined:
•
Economic wants exceed
productive capacity.
•
Use resources efficiently to
maximize fulfillment of
unlimited wants.
The Economic Perspective
•
Key features:
•
•
•
LO1
Scarcity and choice
Purposeful Behavior
Marginal Analysis
Scarcity and Choice
•
•
•
Resources are scarce
Choices must be made
Opportunity cost
•
LO1
There’s no free lunch
Purposeful Behavior
•
•
•
•
LO1
Rational self-interest
Utility
Desired outcomes
Selfless good deed
Marginal Analysis
LO1
•
Compare marginal benefit and
marginal cost
•
Marginal means “extra”
Theories, Principles, and Models
•
LO2
Economic principles and theories
•
•
Generalizations, so imprecise
•
Statements of economic
behavior supported by facts
Ceteris Paribus: Other-thingsequal assumption
•
Microeconomics and
Macroeconomics
Microeconomics
•
•
Macroeconomics
•
•
LO3
Decision making by individual
units
Aggregate, total
Economic speak
Positive and Normative Economics
•
Positive economics
•
•
Normative economics
•
LO3
Deals with economic facts
Subjective perspective of
economy
•
Society’s Economizing Problem
Scarce resources – inputs used to
produce other goods and services
•
•
•
Land – natural resources
Labor – most workers
Capital – manufactured inputs
•
•
LO4
Not money
Investment – spending on production
& accumulation of capital
Society’s Economizing Problem
•
Entrepreneurial ability
•
•
•
•
•
LO4
Takes initiative
Decision maker
Innovator
Takes risk
Key to economic growth
Production Possibilities Model
• Shows maximum combinations of 2
goods that can be produced when
the economy is efficient.
•
LO5
Assumptions:
•
•
•
•
Full employment
Fixed resources
Fixed technology
Two goods
Production Possibilities Table
Production Alternatives
Type of Product
Pizzas
A
B
C
D
E
0
1
2
3
4
10
9
7
4
0
(in hundred thousands)
Industrial Robots
(in thousands)
Plot Points to Create Graph…
LO5
A Growing Economy
•
Economic Growth
•
•
•
LO6
More resources
Improved resource quality
Technological advances
International Trade
•
•
LO6
Specialization
Increased production possibilities
