1、學習必備 歡迎下載How people make decisions: 1 people face trade offsThe cost of something is what you give up to get itRational people think at the marginPeople respond to incentivesHow people interact:5.trade can make everyone better offMarkets are usually a good way to organize economic activityGovernment

2、 can sometimes improve market outcomesHow the economy as 8. A country standard of living depends on its ability to produceA whole works:goods and servicesPrices rise when the government prints too much moneySociety faces a short-run tradeoff between inflation and unemploymentKey concepts:Ability-to-

3、pay principle （稅收的）能力支付原則：The idea that taxes should be levied on a person according to how well that person can shoulder the burdenAbsolute advantage絕對優勢:The comparison among producers of a good according to their productivityAccounting profit 會計禾聆閏：Total revenue minus total explicit costAdverse se

4、lection 逆向選擇:The tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party Agent 代理人:A person who is performing an act for another person, called the principalAggregate-demand curve: a curve that shows the quantity of goods and services that house

5、holds, firms, and the government want to buy at each price levelAggregate risk: risk that affects all economic actors at onceAggregate-supply curve: a curve that shows the quantity of goods and services that firms choose to produce and sell at each price level Appreciation: an increase in the value

6、of a currency as measured by the amount of foreign currency it can buyArrow impossibility theorem 阿羅不可能定理 :A mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences學習必備歡迎下載Average fixed cost平

7、均固定成本:Fixed costs divided by the quantity of outputAverage revenue均收益:Total revenue divided by the quantity soldAverage tax rate平均稅率:Total taxes paid divided by total incomeAverage total cost平均總成本:Total cost divided by the quantity of output Average variable cost平均可變成本:Variable costs divided by the

8、quantity of outputAutomatic stabilizers: changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate actionBalance trade: a situation in which exports equal importsBenefits principle 受益原貝U : The idea that people s

9、hould pay taxes based on the benefits they receive from government services Bond: a certificate of indebtednessBudget constraint 預算約束:The limit on the consumption bundles that a consumer can affordBudget deficit 預算赤字： An excess of government spending over government receiptsBudget surplus 預算盈余：An ex

10、cess of government receipts over government spendingBusiness cycle 經濟周期：Fluctuations in economic activity, such as employment and productionCapital 資產：The equipment and structures used to produce goods and servicesCapital flight: a large and sudden reduction in the demand for assets located in a cou

11、ntryCartel 卡特爾:A group of firms acting in unisonCatch-up effect 后發效應：the property whereby countries that start off poor tend to grow more rapidly that countries that start off richCentral bank: an institution designed to oversee the banking system and regulate the quantity of money in the economyCir

12、cular-flow diagram 循環流向圖:A visual model of the economy that shows how dollars flow through markets among households and firms Closed economy: an economy that does not interact with other economies in the worldCollective bargaining: the process by which unions and firms agree on the terms of employme

13、ntCommodity money: money that takes the form of a commodity with intrinsic value學習必備歡迎下載Coase theorem科斯定理:The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their ownCollusion 共謀:An agreement among firms i

14、n a market about quantities to produce or prices to chargeCommon resource洪同資源:Goods that are rival but not excludable Comparative advantage比較優勢:The comparison among producers of a good according to their opportunity costCompensating differential 補償性工資差別:A difference in wages that arises to offset th

15、e nonmonetary characteristics of different jobsCompetitive market 競爭性市場:A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker Complements互補性商品:Two goods for which an increase in the price of one leads to a decrease in the demand for the other

16、Condorcet paradox the failure of majority rule to produce transitive preferences for societyCompounding: the accumulation of a sum of money in, say, a bank account, where the interest earned remains in the account to earn additional interest in the futureConstant returns to scale 規模報酬不變:The property

17、 whereby long-run average total cost stays the same as the quantity of outputConsumer price index (CPI): a measure of the overall cost of the goods and services bought by a typical consumerConsumer surplus 消費者乘馀：A buyer willingness to pay minus the amount the buyer actually pays Consumption: spendin

18、g by households on goods and services, with the exception of purchases of new housing Cost 成本：The value of everything a seller must give up producing a good Cost-benefit analysis 成本收益分析:A study that compares the costs and benefits to society of providing a public goodCrowding out: a decrease in inve

19、stment that results from government borrowingCrowding-out effect: the offset in aggregate demand that results when expansionary fiscal policy raise the interest rate and thereby reduces investment spendingCross-price elasticity of demand需求的交叉價格彈性:A measureof how much the quantity demanded of one goo

20、d responds to a change in the price of another good, computed as the percentagechange in quantity demanded of the first good divided by the percentagechange in the price of the second good學習必備歡迎下載Currency: the paper bills and coins in the hands of the publicCyclical unemployment: the deviation of un

21、employment from a market distortion, such as a taxDeadweight 10ss無謂損失:The fall in total surplus that results from a market distortion, such as a taxDemand curve需求曲線：A graph of the relationship between the price of a good and the quantity demandedDemand deposits: balances in bank accounts that deposi

22、tors can accesson demand by writing a checkDemand schedule需求表:A table that shows the relationship between the price of a good and the quantity demandedDepreciation: a decreasein the value of a currency as measured by the amount of foreigh currency it can buyDepression: a severe recessionDiminishing

23、marginal product 邊際產品遞減:The property whereby the marginal product of an input declines as the quantity of the input increases Discrimination 歧視:The offering of different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristicsDiseconomie

24、s of scale規模不經濟:The property whereby long-run average total cost rises as the quantity of output increasesDiscount rate: the interest rate on the loans that the Fed makes to banks Discouraged workers: individuals who would like to work but have given up looking for jobDiversification: the reduction

25、of risk achieved by replacing a single risk with a large number of smaller unrelated risksDominant strategy 占優策略：A strategy that is best for a player in a game regardless of the strategies chosen by the other playersEconomic profit 經濟利潤：Total revenue minus total cost, including both explicit and imp

26、licit costsEconomics經濟學:The study of how society manages its scarce resources Economies of scale 來見模經濟：The property whereby long-run average total cost falls as the quantity of output increasesEfficiency 效率：The property of society getting the most it can from its scarce resourcesEfficiency wages 效率工

27、資:Above-equilibrium wages paid by firms in order to increase worker productivityEfficient scale: the quantity of output that minimizes average total cost Elasticity: a measure of the responsiveness of quantity demanded or quantity學習必備歡迎下載supplied to one of its determinantsEquilibrium : a situation i

28、n which the price has reached the level where quantity supplied equals quantity demandedEquilibrium price: the price that balances quantity supplied and quantity demandedEquilibrium quantity : the quantity supplied and the quantity demanded at the equilibrium priceEquity: the property of distributin

29、g economic prosperity fairly among the members of societyExcludability: the property of a good whereby a person can be prevented from using itExplicit costs: input costs that require an outlay of money by the firmExport: goods produced domestically and sold abroadExternality: the uncompensated impac

30、t of one person actions on the wellbeing of a bystanderFactors of production: the inputs used to produce goods and servicesFederal reserve (Fed) : the central bank of the united statesFiat money: money without intrinsic value that is used as money because of government decreeFinance: the field that

31、studies how people make decisions regarding the allocation of resources over time and the handling of riskFinancial intermediaries: financial institutions through which savers can indirectly provide funds to borrowersFinancial markets: financial institutions through which savers can directly provide

32、 funds to borrowersFinancial system: the group of institutions in the economy that help to match one person s saving with another person s investment Fisher effect: the one-for-one adjustment of the nominal interest rate to the inflation rateFractional-reserve banking: a banking system in which bank

33、s hold only a fraction of deposits as reservesFrictional unemployment: unemployment that results becauseit takes time for workers to search for the jobs that best suit their tastes and skills Fundamental analysis: the study of a company, asccounting statements and future prospects to determine its v

34、alueFuture value: the amount of money in the future that an amount of money today will yield, given prevailing interest ratesFixed costs: costs that do not vary with the quantity of output producedFree rider: a person who receives the benefit of a good but avoids paying for學習必備歡迎下載itGame theory the

35、study of how people behave in strategic situationsGDP deflator: a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100Government purchases: spending on goods and services by local, state, and federal governmentsGross domestic product GDP: the market value of all fi

36、nal goods and services produced within a country in a given period of timeHorizontal equity: the idea that taxpayers with similar abilities to pay taxes should pay the same amountHuman capital: the accumulation of investment in people, such as education and on-the-job trainingIdiosyncratic risk: ris

37、k that affects only a single economic actorImplicit costs: input costs that do not require an outlay of money by the firm Import quota: a limit on the quantity of a good that can be produced abroad and sold domesticallyImports: goods produced abroad and sold domesticallyIncome effect: the change in

38、consumption that results when a price change moves the consumer to a higher or lower indifference curveIncome elasticity of demand: a measure of how much the quantity demanded of a good responds to a change in consumers income, computed as the percentage change in quantity demanded divided by the pe

39、rcentage change in incomeIndexation: the automatic correction of a dollar amount for the effects of inflation by law or contractIndifference curve: a curve that shows consumption bundles that give the consumer the same level of satisfactionInferior good: a good for which, other things equal, an incr

40、ease in income leads to a decrease in demandInflation: an increase in the overall level of prices in the economyInflation rate: the percentagechange in the price index from the preceding periodInflation tax: the revenue the government raises by creating money Informationally efficient: reflecting al

41、l available information in a rational wayIn-kind transfers transfers to the poor given in the form of goods and services rather than cashInternalizing an externality: altering incentives so that people take account of the external effects of their actions學習必備歡迎下載Investment: spending on capital equip

42、ment, inventories, and structures, including household purchases of new housingJob search: the process by which workers find appropriate jobs given their tastes and skillslabor force: the total number of workers, including both the employed and the unemployedLabor-force participation rate: the perce

43、ntage of the adult population that is in the labor forceLaw of demand: the claim that, other things equal, the quantity demanded of a good falls when the price of the good risesLaw of supply : the claim that, other things equal, the quantity supplied of a good rises when the price of the good risesL

44、aw of supply and demand: the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balanceLiberalism: the political philosophy according to which the government should choose policies deemed to be just, as evaluated by an impartial obser

45、ve behind a “veil of ignorance ”Libertarianism: the political philosophy according to which the government should punish crimes and enforce voluntary agreements but not redistribute incomeLife cycle: the regular pattern of income variation over a person s lifeLiquidity: the ease with wh ich an asset

46、 can be converted into the economy smedium of exchangeLump-sum tax: a tax that is the same amount for every personMacroeconomics the study of economy-wide phenomena, including inflation, unemployment, and economic growthMarginal changes small incremental adjustments to a plan of actionMarginal cost:

47、 the increase in total cost that arises from an extra unit of productionMarginal product: the increase in output that arises from an additional unit of inputMarginal product of labor: the increase in the amount of output from an additional unit of laborMarginal rate of substitution: the rate at whic

48、h a consumer is willing to trade one good for anotherMarginal revenue the change in total revenue from an additional unit soldMarginal tax rate: the extra taxes paid on an additional dollar of incomeMarket: a group of buyers and sellers of a particular good or services學習必備歡迎下載Market economy an econo

49、my that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and servicesMarket failure: a situation in which a market left on its own fails to allocate resources efficientlyMarket for loanable funds: the market in which those who

50、 want to save supply funds and those who want to borrow to invest demand fundsMarket power: the ability of a single economic actor (or small group of actors) to have a substantial influence on market pricesMaximin criterion : the claim that the government should aim to maximize the well-being of the

51、 worst-off person in societyMedian voter theorem: a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voterMenu cost: the costs of changi

52、ng pricesMicroeconomics: the study of how households and firms make decisions and how they interact in marketsModel of aggregate demand and aggregate supply: the model that most economists use to explain short-run fluctuations in economic activity around its long-run trendMonetary neutrality: the pr

53、oposition that changes in the money supply do not affect real variablesMonetary policy: the setting of the money supply by policymakers in the central bankMoney: the set of assetsin an economy that people regularly use to buy goods and services from other peopleMoney multiplier: the amount of money

54、the banking system generates with each dollar of reservesMoney supply: the quantity of money available in the economy monopolistic competition: market structures in which many firms sell products that are similar but not identicalMonopoly: a firm that is the sole seller of a product without close su

55、bstitutes Moral hazard the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behaviorMultiplier effect: the additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increases consumer spendingMutual

56、 fund: an institution that sells shares to the public and uses the學習必備歡迎下載proceeds to buy a portfolio of stocks and bondsNash equilibrium: a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the more firmsNational saving: th

57、e total income in the economy that remains after paying for consumption and government purchasesNatural-rate hypothesis: the claim that unemployment eventually returns to its normal, or natural, rate, regardless of the rate of inflationNatural rate of unemployment: the normal rate of unemployment ar

58、ound which the unemployment rate fluctuatesNatural resources: the inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral depositsNegative income tax: a tax system that collects revenue from high-income households and gives transfers to low-inc

59、ome householdsNet capital outflow: the purchasesof foreign assetsby domestic residents minus the purchases of domestic assets by foreignersNet exports: the value of a nation s exports minus the value of its imports; also called the trade balanceNominal GDP: the production of goods and services value

60、d at current pricesNominal interest rate: the interest rate as usually reported without a correction for the effects of inflationNominal variables: variables measured in monetary unitsNormal good: a good for which, other things equal, an increase in income leads to an increase in demandNormative sta