22 C H A P T E R 1 Economics: Foundations and Models
2.4 What is the difference between efficiency and equity? Why
do government policymakers often face a trade-off be-
tween efﬁciency and equity?
Problems and Applications
2.5 When the price of Microsoft
Mrs Adam Smith
Dec 7th 2006 From The Economist print edition
Modern humanity's battle with Neanderthals may have been won by the women who invented the
division of labour
NEANDERTHAL man was a strong, large-brained, skilful big-game hunter who had survive
14 C H A P T E R 1 Economics: Foundations and Models
Don’t Let This Happen to You
n’t Confuse Positive Analysis Wiih minimum wage law because they are paid a higher wage
goth/e An0|y3i3 than they otherwise would be. In other words, the mini-
mum wage la
d by Jingjing Zhou ([email protected]) on 611419016 from 126.96.36.199 authorized to use until 612812016. Use beyond the authorized user orvalid subscription date represents a
Using Grophs ond Formul
AN INSIDE LOOK
T err' 020: The
Doctor WT)@ See
It’s the year 2020. 20120,] ju
sion In today’s world of health and
wellness, computer- guided laser vi-
sion correction is so commonplace
that eye glasses are hardly necessary
6 C H A P T E R 1 Economics: Foundations and Models
Percentage of adult population that is obese Percentage of adult population that is obese
E] 10%—14% I 15%—19% I 20%—24% I 25%—29% I 30% —<35%
(a) Obesity rates in 1994 (b) Obesity rates in 2011
FRBSF ECONOMIC LETTER
June 14, 2010
The Feds Exit Strategy for Monetary Policy
GLENN D. RUDEBUSCH
As the financial crisis has receded, the Federal Reserve has scaled back its extraordinary provision
of liquidity. Eventually, the Fed will remove
Mankiw chapter 16: money supply.
You should know vocabulary and
Aplia readings on course material:
1. Adam Smith on money.
2. Rudebusch on exit.
money supply and financial crises.
money and banks: bal
Principles of Macroeconomics
Professor Timothy S. Fuerst
Please read and review:
2. Mrs. Adam Smith and Homo Economicus
3. Chapters 1-2 of Mankiw.
Principles of Macro, T.S. Fuerst, Week 1.
Foundotions ond Models
1.1 Three Key Economic Ideas.
Explain these three key
economic ideas: People are
rational; people respond to
economic incentives: and
optimal decisions are made a
4 C H A P T E R 1 Economics: Foundations and Models
11 this book, we use economics to answer questions such as the following:
0 How are the prices of goods and services determined?
0 Why have health care costs risen so rapidly?
0 Why do ﬁrms engage in int
8 C H A P T E R 1 Economics: Foundations and Models
MyEconLab Study Plan
1.2 LEARNING OBJECTIVE
Discuss how an economy
answers these questions: What
goods and services will be
produced? How will the goods
and services be produced?
Who will receive the goo
12 C H A P T E R 1 Economics: Foundations and Models
Economists use economic models to answer questions. For example, will the United
States have a sufﬁcient number of doctors in 2020? For such a complicated question,
economists often use several models t
16 C H A P T E R 1 Economics: Foundations and Models
also involves policy issues, such as analyzing the most efficient way to reduce teenage
smoking, analyzing the costs and beneﬁts of approving the sale of a new prescription
drug, and analyzing the most