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micro-economics introduction (introduction (definition (marginal…
micro-economics introduction
introduction
definition
economy: is study of how society manages its scarce resources稀缺资源
scarce：the limited nature of society's resource
economists study
how much people work, what they buy, how much they save and how they invest their saving
how people interact with one another
efficiency
get the most it can from its scarce resource
equity
distributing wealth fairly among members of a society
opportunity cost
the best alternative that must be given up to obtain some item
marginal change边际变动
incremental adjustments微小增量调整 to an existing plan of action
Rational people: choose an action if MB>MC
incentives affect the balance between MB and MC
compulsory seat belt law
sources of gains from trade
asymmetric preferences 不对称偏好
gains from specialisation专业化收益
markets
in a market economy, resources are allocated through the decentralised decisions of many firms and households as they interact in markets for goods and services
the invisible hand
through the market mechanism, individual pursuit of self-interest promotes the welfare of the society
prices adjust to guide buyers and sellers to reach outcomes that maximise society's wellbeing as a whole
government intervention in the market can impede the invisible hand's ability to coordinate the action of millions of households and firms that make up the economy
market fuilure
is a situation in which a market left on its own fails to allocate resources efficiently
market can fail if
externality
the uncompensated impact of one person’s actions on the wellbeing of a bystander
外部性的概念是由马歇尔和庇古在20世纪初提出的，是指一个经济主体(生产者或消费者)在自己的活动中对旁观者的福利产生了一种有利影响或不利影响,这种有利影响带来的利益(或者说收益)或不利影响带来的损失(或者说成本)，都不是生产者或消费者本人所获得或承担的,是一种经济力量对另一种经济力量“非市场性”的附带影响
market power
the ability of a single player or a small group of players to have a substantial influence on market prices
e.g 格力，美的
government
rules and institutions
The invisible hand can only function if government enforces the rules and maintains the institutions that support a market economy.
property rights
We rely on government-provided police and courts to enforce our property rights
equity
Government has a role to promote equity through redistribution.
A country’s standard of living depends on its ability to produce goods and services
Almost all variation in living standards is attributable to differences in countries’ productivity
productivity
is the quantity of goods and services produced from each hour of a worker’s time
How will a policy will affect living standards
It depends on how it will affect our ability to produce goods and services
Prices rise when the government prints too much money
inflation
Inflation is an increase in the overall level of prices in the economy.
In most cases of large or persistent inflation, the culprit turns out 罪魁祸首to be the growth in the quantity of money.
When a government creates large quantities of the nation’s money, the value of the money falls
Society faces a short-term trade-off短期权衡 between inflation and unemployment
The Phillips curve
depicts 描述the short-term trade-off between inflation and unemployment
process
Lower quantities of money reduce the amount people can spend
If prices are sticky in the short run, this reduces the quantity of goods and services that firms can sell
Lower sales cause firms to lay off workers.
Thus, the reduction in the quantity of money raises unemployment temporarily until prices have fully adjusted to the change