曼昆宏观经济学复习提纲charpter1

Charpter1
Economy:
Like a household, a society faces many decisions.
Manage resource. Scarcity : the limited nature of society’s resources
Principle1 people face trade-offs
There aren’t no such thing as a free lunch.
To get one thing that we like, we usually have to give up another thing that we like.
Example : (1) student’s time (2) family income (3) gun and butter: national defense (guns) to e the standard of living (4) environment and income (5) efficiency and equality: efficiency means getting benefits. Equality means distribute uniformly.
Princilpe2 the cost of something is what you give to get it.
Because people face trade-offs, making decisions requires comparing the costs and the benefits of the alternatives.
Opportunity cost of an item is what you give up to get that item. (1,no get still cost=sunk cost 2,implicitic cost must be considered)
Principle3 rational people think at the margin
Marginal changes: small incremental adjustments to an existing plan of action.
Compare the marginal benefits and the costs. Example: (1) the airline.(2) water plentiful marginal benefit small ----cheap, diamond otherwise
Principle4 people respond to incentive
An incentive is something that induces a person to act, such as the prospect of a punishment or a reward.
Example (1) apple price rises ---people eat fewer
(2) many policies change the costs or benefits that people face and, therefore, alter their behavior. (tax
1----4: how people make decisions
Principle5 trade can make everyone better off
Trade allows countries to specialize in what they do best and to enjoy a greater variety of goods and services.
Principle6 markets are usually a good way to organize the economic activities
In market economy decisions of a central planner are replaced by the decisions of millions of firms and households.
Interact as guided by an invisible hand: individual buyers and sellers to reach own well-being that, in many cases, maximize the well-being of society as a whole.
Principle7 government can sometimes improves market outcome.
Market needs government enforces the rules and maintains the institutions.
Institutions enforce property rights.
Governments also can promote the efficiency and the equality.
A, EFFICIENCY--------Market failure: which the market on its own fails to produce an efficient allocation of resources.(example: (1)externality ----the impact of one person’s actions on the well-being of a bystander. (2)market power
B, EDUALITY---------
5-----7 HOW PEOPLE INTERACT
PRINCIPLE8 A COUNTRY’S STANDARD OF LIVING DEPANDING ON ITS ABILITY TO PRODUCE GOODS AND SERVICES
Standard of living differs over places and time surprisingly.
Because of the productivity!
Productivity is the amount of goods and services produced from each unit of labor input.
Principle9 Prices rise when government prints too much money
Inflation is because of growth in the quantity of money. When a government creates large quantities of the nation’s money, the value of th e money falls.
Principle10 society faces a short-run trade-off between inflation and unemployment.。