1、 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed. Prepared by: Fernando & Yvonn QuijanoEconomics:Foundations and Models 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations an

2、d Models2 of 28References(1)R. Glenn Hubbard; Anthony Patrick OBrien，Economics，機械工業出版社(2)Samuelson and Nordhars, Economics,17th Ed.,McGraw-Hill Inc.,New York,2001(3)微觀經濟學, 羅伯特S平狄克(Robert S.Pindyck)、丹尼爾L魯賓費爾德(Daniel L.Rubinfeld),中國人民大學出版社 2006 Prentice Hall Business Publishing Economics R. Glenn Hubb

3、ard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models3 of 28Final scoreDiscussion 10 %Homework 20 %Final exam 70 % 100% 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models4 of 28Topics l

4、 Gasoline pricel Apple and Jobsl Debt crisis of EUR (macro)l CPI and Currency policy (macro)l 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models5 of 28 Part 1. IntroductionChapter 1. Economics: Foundations and

5、ModelsChapter 2. Tradeoffs, Comparative Advantage, and the Market SystemChapter 3. Where Prices Come From: The Interaction of Demand and SupplyChapter 4. Economic Efficiency, Government Price Setting, and TaxesPart 2. Markets in ActionChapter 5. Externalities, Environmental Policy, and Public GoodsC

6、hapter 6. Elasticity: The Responsiveness of Demand and SupplyPart 3. Firms in the Domestic and International EconomiesChapter 7. Firms, the Stock Market, and Corporate GovernanceChapter 8. Comparative Advantage and the Gains from International Trade 2006 Prentice Hall Business Publishing Economics R

7、. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models6 of 28 Part 4. Microeconomic Foundations: Consumers and FirmsChapter 9. Consumer Choice and Behavioral EconomicsChapter 10. Production, Technology, and CostsPart 5. Market Structure and Firm StrategyChapter 11

8、. Firms in Perfectly Competitive MarketsChapter 12. Monopolistic Competition: The Competitive Model in a More Realistic SettingChapter 13. Oligopoly: Firms in Less Competitive MarketsChapter 14. Monopoly and Antitrust PolicyChapter 15. Pricing StrategyPart 6. Markets for Factors of ProductionChapter

9、 16. The Markets for Labor and Other Factors of ProductionPart 7. Information, Taxes, and the Distribution of IncomeChapter 17. The Economics of InformationChapter 18. Public Choice, Taxes, and the Distribution of Income 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patr

10、ick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models7 of 28 After studying this chapter, you should be able to:Discuss these three important economic ideas: People are rational. People respond to incentives. Optimal decisions are made at the margin.Discuss how an economy answers these quest

11、ions: What goods and services will be produced? How will the goods and services be produced? Who will receive the goods and services?Understand the role of models in economic analysis.Distinguish between microeconomics and macroeconomics.Become familiar with important economic terms.What Happens Whe

12、n U.S. FirmsMove to China?LEARNING OBJECTIVES12345“Many U.S., Japanese, and European firms have been moving the production of goods and services to other countries.” 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and

13、Models8 of 28Economics: Foundations and ModelsIn this book, we use economics to answer questions such as the following:“How are the prices of goods and services determined?”“How does pollution affect the economy, and how should government policy deal with these effects?”“Why do firms engage in inter

14、national trade, and how do government policies affect international trade?”“Why does government control the prices of some goods and services, and what are the effects of those controls?” 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Econo

15、mics: Foundations and Models9 of 28Economics: Foundations and ModelsScarcity The situation where unlimited wants exceed the limited resources available to fulfill those wants. Economics The study of the choices people make to attain their goals, given their scarce resources. 2006 Prentice Hall Busin

16、ess Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models10 of 28Building a Foundation: Economics and Individual DecisionsLEARNING OBJECTIVE1Market An arrangement or institution that brings together buyers and sellers of a good or service.Ma

17、rginal analysis Analysis that involves comparing marginal benefits and marginal costs.Three important ideas:People are rationalPeople respond to economic incentivesOptimal decisions are made at the margin 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed

18、.CHAPTER 1: Economics: Foundations and Models11 of 28 Apple Computer Makes a Decision at the Margin1 - 1LEARNING OBJECTIVE1Should Apple produce an additional 300,000 iPods?In solving the problem, consider the following:Optimal decisions are made at the margin.An activity should be continued to the p

19、oint where the marginal benefit is equal to the marginal cost.In this case, the correct decision requires information about additional revenue and additional cost. 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Mo

20、dels12 of 28The Economic Problem That Every Society Must SolveLEARNING OBJECTIVE2Trade-off The idea that because of scarcity, producing more of one good or service means producing less of another good or service.Three fundamental questions: What goods and services will be produced? How will the good

21、s and services be produced? Who will receive the goods and services produced? 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models13 of 28The Economic Problem That Every Society Must SolveCentrally planned econom

22、y An economy in which the government decides how economic resources will be allocated.Market economy An economy in which the decisions of households and firms interacting in markets allocate economic resources.Centrally Planned Economies versus Market Economies 2006 Prentice Hall Business Publishing

23、 Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models14 of 28The Modern “Mixed” EconomyMixed economy An economy in which most economic decisions result from the interaction of buyers and sellers in markets, but where the government plays a significant

24、 role in the allocation of resources. 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models15 of 28The Modern “Mixed” EconomyProductive efficiency Occurs when a good or service is produced at the lowest possible c

25、ost.Allocative efficiency A state of the economy in which production reflects consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it.Voluntary exchange The situatio

26、n that occurs in markets when both the buyer and seller of a product are made better off by the transaction.Equity The fair distribution of economic benefits.Efficiency and Equity 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Fo

27、undations and Models16 of 28Economic ModelsLEARNING OBJECTIVE3Economic model A simplified version of some aspect of economic life used to analyze an economic issue.To develop a model, economists generally follow these steps:1.Decide on the assumptions to be used in developing the model.2.Formulate a

28、 testable hypothesis.3.Use economic data to test the hypothesis.4.Revise the model if it fails to explain properly the economic data.5.Retain the revised model to help answer similar economic questions in the future.Economic variable Something measurable that can have different values, such as the w

29、ages of software programmers. 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models17 of 28Economic ModelsPositive analysis Analysis concerned with what is.Normative analysis Analysis concerned with what ought to

30、be.Normative and Positive AnalysisDont Confuse Positive Analysis with Normative AnalysisDoes outsourcing by U.S. firms raise or lower incomes in the United States?When Economists Disagree: A Debate Over Outsourcing1 - 1 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patri

31、ck OBrien1st ed.CHAPTER 1: Economics: Foundations and Models18 of 28Microeconomics and MacroeconomicsLEARNING OBJECTIVE4Microeconomics The study of how households and businesses make choices, how they interact in markets, and how the government attempts to influence their choices.Macroeconomics The

32、study of the economy as a whole, including topics such as inflation, unemployment, and economic growth. 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models19 of 28A Preview of Important Economic TermsLEARNING OB

33、JECTIVE5EntrepreneurInnovationTechnologyFirm, company, or businessGoodsServicesRevenueOpportunity costProfitHouseholdFactors of production or economic resourcesCapitalHuman capital 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: F

34、oundations and Models20 of 28Many countries, including the United States, have experienced rapidly increasing exports to China.The Halo Effect: How Chinas Expansion Will Affect Jobs and Growth Elsewhere 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.C

35、HAPTER 1: Economics: Foundations and Models21 of 28Allocative efficiencyCentrally planned economyEconomic modelEconomic variableEconomicsEquityMacroeconomicsMarginal analysisMarketMarket economyMicroeconomicsMixed economyNormative analysisPositive analysisProductive efficiencyScarcityTrade-offVolunt

36、ary exchange 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models22 of 28Appendix 1A:Using Graphs and FormulasA graph is like a street mapit is a simplified version of reality 2006 Prentice Hall Business Publishi

37、ng Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models23 of 28Appendix 1A:Using Graphs and FormulasGraphs of One Variable1A - 1Market Shares in the U.S.Automobile Market 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patri

38、ck OBrien1st ed.CHAPTER 1: Economics: Foundations and Models24 of 28Appendix 1A:Using Graphs and Formulas1A - 2Time-Series GraphsGraphs of One Variable 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models25 of 28

39、Appendix 1A:Using Graphs and FormulasGraphs of Two Variables1A - 3Plotting Price and QuantityPoints in a Graph 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models26 of 28Appendix 1A:Using Graphs and Formulas1A -

40、 4Calculating the Slope of a LineGraphs of Two VariablesSlopes of LinesRunRisexytal axishe horizonvalue on tChange in l axishe verticavalue on tChange in Slope 2 . 0102)5565()14$12($of pizza Quantity pizza of Price Slope 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patr

41、ick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models27 of 28Appendix 1A:Using Graphs and Formulas1A - 5Graphs of Two VariablesTaking Into Account More Than Two Variables on a GraphShowing Three Variables on a Graph 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony P

42、atrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models28 of 28Appendix 1A:Using Graphs and Formulas1A - 6Graphs of Two VariablesPositive and Negative RelationshipsGraphing the Direct Relationship between Income and Consumption Spending 2006 Prentice Hall Business Publishing Economics R. Gl

43、enn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models29 of 28Appendix 1A:Using Graphs and Formulas1A - 7Graphs of Two VariablesSlopes of Nonlinear CurvesThe Slope of a Nonlinear Curve 2006 Prentice Hall Business Publishing Economics R. Glenn Hubbard, Anthony Patrick OBrien1st ed.CHAPTER 1: Economics: Foundations and Models30 of 28Appendix 1A:Using Graphs and FormulasFormulasFormula for a Percentage Change100 x GDPGDPGDP200320032004100 x )periodfirst thein Va