This article is the study notes Principles of Economics Mankiw, to the Ten Principles of Economics begins with the main line, while understanding their own discretion. On the one hand deepen their understanding of, on the one hand to facilitate the reader's understanding. Wang criticism.
1 People face tradeoffs
Select one thing, means giving up something else (all aspects of everything, all aspects of leadership proposed guidance will only appear in special regime). The decision is to choose between different tasks. Limited time, limited financial resources, limited energy, can not put all your eggs in one basket, nor can your eggs in too many baskets.
For example micro, each time limited. During idle, you choose to hold the baby, or choose to invest in themselves, or choose to play the game to bed and so on. Choose whether active or passive choice, when you choose A, it means giving B. It used to mean efforts is critical, and then I realized: Choose the wrong direction, efforts will only make you drift away. Just choose the wrong funds / vote / opportunity to bid for more money, the more they lose.
Macroscopically, the community also face tradeoffs. Such as the classic case of "guns and butter", when a society will be spending more on defense, domestic spending for improving the quality of life for less (refer North Korea). When forced by environmental laws and regulations, measures for enterprises to reduce pollution increases the cost of production per unit production mouth / services, so leading to decline in corporate profits, which may result in nearly wages decline (refer to environmental policy).
Another tradeoff society faces is efficiency and equality. Efficiency is the best interests of the current use of resources acquired, is the cake can do much; equality refers to how the distribution of benefits to the members of society, that is, how cut the cake. The design of government decision-making, the two goals are often different. Such as personal income tax classification system, the higher the income the more people need to pay a tax, the money flowing into the national income; there are some policies, such as welfare, unemployment insurance, through these policies, there will be part of the national income flowing into low-income or unemployed. When the government will give low or no income when income of high-income groups of the population redistribution, it will reduce the incentive for hard work (the Internet can be compared with the state-owned enterprises).
Trade-offs, through individual, family, society, is an important factor in the economy. Select, often in an effort important; more important than capital.
2 under the trade-offs, " take " cost is the " house " ( opportunity cost )
When faced with multiple options, people need to make trade-offs, this time need to compare the costs and benefits compare each choice. More learning, for example, you choose to go to school, the value of knowledge and incidental income is behind; how cost accounting of it, is the daily life of four years of college tuition + it?
The cost calculation exist several problems: first, if not college, you also need the basic necessities. Only the basic necessities of basic necessities compare school to school when a long time, more out of this part of the real costs; second, the time cost. Go to school for four years unable to work (get income from work), rather than go to school has been working for four years. Abandoned four years of work is revenue costs.
The cost is the opportunity cost, that is, in order to get something must give up something. It is a simple hypothesis, if ordinary people on the university, the book cost of basic necessities 30,000 + tuition 40000; not on, then college, basic necessities is 50,000, the income of 40 million. Then the person's real cost is the cost of basic necessities (30,000 -50,000) + 40000 + opportunity cost of tuition (400,000) = 420,000. After obtaining a university degree, this one can be sure to obtain more than 420,000 of income, go to college.
For some special populations, such as professional athletes, four-year income of up to several million, the cost of college is too large, many people will choose to give up and put into motion the cause of school.
As another extreme example, give you a choice: five million lottery and existing work, a second election. If you are an ordinary working-class, we will not hesitate to choose the lottery, because the opportunity cost (income existing work) too low.
3 rational people think at the margin ( marginal benefit, marginal cost )
Economists assume that people are rational (claiming to be rational person, that the act itself is emotional), under the existing conditions and resources, rational and purposeful system will do its utmost to achieve this goal. Rational people know that many decisions are not black and white, but gray place between them, not the mutation conversion, but a gradual approach. Introducing marginal changes in terminology, describe small incremental adjustments of existing action plans. For example, wine on the table, you either do not drink or have a drink. This you did not intend to drink the first cup, urging people to drink one would say a little bit, you want a little bit of it; the second cup, drinks upon people that did not change what you see, ah, is the friendship cup, two cups are brothers, Do you want another drink should be all right; the third cup, urging people to drink a man told drank, they have to face B, so you drank ... ... Every time a little bit, the last is half a catty catty. This is the marginal change, of course, marginal changes may lead to changes in the macro.
Analogy, benefits and costs under marginal changes, that is, marginal revenue, marginal cost. People need to compare the marginal benefits and marginal costs to make decisions. For example, there are urban and rural high school bus, remember the fare seems to be 8 dollars. Generally speaking can not afford the price. When the car engine started, I just arrived, you can cut one. Ticketing staff will often say, "Bank of the line, Come on, waiting to take it." She should not know the marginal benefit and marginal cost, but she knows that more than one person, the point is to increase the weight of the multi-point oil consumption. Other services she was done. Marginal revenue is greater than marginal cost, we can make the appropriate decisions.
4 People respond to incentives
Motivation is something that causes a person to make some kind of behavior (such as punishment or reward). Economics, motivation, social critical to the operation of individual behavior. Another perspective, legal provisions, salaries and bonuses, offspring are all incentives for individual behavior. The animal world, only the strong will get the right to mate.
Operation of the market, people respond to incentives. When pork prices, consumers will consider eat less pork, duck, chicken and so turn to the past which led to increased poultry meat; pork prices, the policy of protection, pig farmers will expand production, the recent pig feed will sideband prices; large-scale slaughter of pigs, pig farmers find too much to buy a pig, so had to cut prices, while pork prices fell nearly ... .. Price behavior of consumers and producers on how to encourage economic market allocation of resources is essential.
The policy also motivate behavior, businesses, individuals will respond to this. Under the new crown epidemic, said the policy to fewer layoffs or layoffs, the company returned to 50% unemployment insurance, that some companies will consider whether layoffs less favorable; policy given masks to protect producers, and that there will be more companies want to switch production masks; the government says the cost of treatment reveal all the details, it was a bit poor patients would not have to worry because the cost of treatment and to conceal the truth.
To Syria ......
The text after the words: economics is more like an art than a science. It is learned that dim it? I do not know either…..
