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1、ALecturePresentationinPowerPointtoAccompanyPrinciplesofEconomicsSecondEditionbyN.GregoryMankiwPreparedbyMarkP.Karscig,DepartmentofEconomics&Finance,CentralMissouriStateUniversity.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.TenPrinciplesofE
2、conomicsChapter1Copyright©2001byHarcourt,Inc.Allrightsreserved.Requestsforpermissiontomakecopiesofanypartoftheworkshouldbemailedto:PermissionsDepartment,HarcourtCollegePublishers,6277SeaHarborDrive,Orlando,Florida32887-6777.Economistsstudy...uHowpeoplemaked
3、ecisions.uHowpeopleinteractwitheachother.uTheforcesandtrendsthataffecttheeconomyasawhole.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.TenPrinciplesofEconomicsHowPeopleMakeDecisions£Peoplefacetradeoffs.§Thecostofsomethingiswhatyougiveuptoget
4、it.•Rationalpeoplethinkatthemargin.¶Peoplerespondtoincentives.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.TenPrinciplesofEconomicsHowPeopleInteractßTradecanmakeeveryonebetteroff.®Marketsareusuallyagoodwaytoorganizeeconomicactivity.©Governm
5、entscansometimesimproveeconomicoutcomes.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.TenPrinciplesofEconomicsHowtheEconomyasaWholeWorks™Thestandardoflivingdependsonacountry’sproduction.´Pricesrisewhenthegovernmentprintstoomuchmoney.¨Society
6、facesashort-runtradeoffbetweeninflationandunemployment.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.1.Peoplefacetradeoffs.Togetonething,weusuallyhavetogiveupanotherthing.uGunsv.butteruFoodv.clothinguLeisuretimev.workuEfficiencyv.equityMakin
7、gdecisionsrequirestradingoffonegoalagainstanother.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.1.Peoplefacetradeoffs.Efficiencyv.EquityuEfficiencymeanssocietygetsthemostthatitcanfromitsscarceresources.uEquitymeansthebenefitsofthoseresources
8、aredistributedfairlyamongthemembersofsociety.Harcourt,Inc.itemsandderiveditemscopyright©2001byHarcourt,Inc.2.Thecostofsomethingiswhatyougiveuptogetit.Decisionsrequirecomparingcostsandbenefitsofalternat
