01 introduction PPT

Forwardlooking behavior however may still be rooted

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Unformatted text preview: they can to anticipate the uncertain consequences of their actions. Forwardlooking behavior, however, may still be rooted in the past, for the past can exert a long shadow on attitudes and values …” internet photo 10:37:38 7 wiki photo Mankiw, Gregory, Essentials of Economics, 2012, p.3: “Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by an allpowerful dictator but through the combined actions of millions of households and firms. Economists therefore study how people make decisions: how much they work. What they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another. For example, they examine …” 10:37:38 10:37:38 Mankiw, Gregory, Essentials of Economics, 2012, pp. 22: “economics is a science to study our society. A science studying social behavior is called a social science. … The essence of science, however, is the scientific method, the dispassionate development and testing of theories how the world works” 9 10:37:38 Mankiw, Gregory, Essentials of Economics, 2012, pp. 22: “the essence of science, however, is the scientific method.” What is scientific method? 11 10 the end (1) get observations, find a pattern (2) hypothesize a theory (3) test by doing experiment or using data (4) more observations and refine the theory 10:37:38 8 10:37:38 12 2 Ten principles of Economics (Mankiw, Gregory N., 2012, Essentials of Economics, 6th Edition, South Western Cengage Learning): Seven Core principles (Frank, Robert H., and Ben S. Bernanke, 2010, Principles of Microeconomics, 4th edition, international edition, McGraw-Hill): (1) People face Trade-offs (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 (5) Trade can make Everyone Better off (6) Markets are usually a good way to organize Economic activity (7) Government can sometimes improve Market outcome (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 Trade-off between Inflation and Unemployment (1) The Scarcity Principle (No free lunch) (2) The Cost and Benefit Principle (3) The Incentive Principle (4) The Principle of Comparative Advantage (5)...
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This document was uploaded on 03/06/2014.

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