How people make decisions: 1. people face trade offs 2. The cost of something is what you give up to get it3. Rational people think at the margin4. People respond to incentivesHow people interact: 5.trade can make everyone better off6. Markets are usually a good way to organize economic activity7. Government can sometimes improve market outcomesHow the economy as 8. A countrys standard of living depends on its ability to produce A whole works: goods and services9. Prices rise when the government prints too much money10. Society faces a short-run tradeoff between inflation and unemploymentKey concepts:Ability-to-pay principle（税收的）能力支付原则: The idea that taxes should be levied on a person according to how well that person can shoulder the burdenAbsolute advantage 绝对优势 : The comparison among producers of a good according to their productivityAccounting profit 会计利润 : Total revenue minus total explicit costAdverse selection 逆向选择: The tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed partyAgent 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 households, 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 levelAppreciation: an increase in the value of a currency as measured by the amount of foreign currency it can buyArrows impossibility theorem 阿罗不可能定理 : A mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferencesAverage fixed cost 平均固定成本: Fixed costs divided by the quantity of outputAverage revenue 平均收益: Total revenue divided by the quantity soldAverage tax rate 平均税率 : Total taxes paid divided by total incomeAverage total cost 平均总成本: Total cost divided by the quantity of outputAverage variable cost 平均可变成本: Variable costs divided by the 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 受益原则: The idea that people should pay taxes based on the benefits they receive from government servicesBond: a certificate of indebtednessBudget constraint 预算约束: The limit on the consumption bundles that a consumer can affordBudget deficit 预算赤字: An excess of government spending over government receiptsBudget surplus 预算盈余: An excess of government receipts over government spendingBusiness cycle 经济周期: Fluctuations in economic activity, such as employment and productionCapital 资产: The equipment and structures used to produce goods and servicesCapital flight: a large and sudden reduction in the demand for assets located in a countryCartel 卡特尔: A group of firms acting in unisonCatch-up effect 后发效应: 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 economyCircular-flow diagram 循环流向图: A visual model of the economy that shows how dollars flow through markets among households and firmsClosed 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 employmentCommodity money: money that takes the form of a commodity with intrinsic valueCoase 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 共谋: An agreement among firms in a market about quantities to produce or prices to chargeCommon resources 共同资源: Goods that are rival but not excludableComparative advantage 比较优势: The comparison among producers of a good according to their opportunity costCompensating differential 补偿性工资差别: A difference in wages that arises to offset the nonmonetary characteristics of different jobsCompetitive market 竞争性市场: A market with many buyers and sellers trading identical products so that each buyer and seller is a price takerComplements 互补性商品: Two goods for which an increase in the price of one leads to a decrease in the demand for the otherCondorcet 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 规模报酬不变: The property whereby long-run average total cost stays the same as the quantity of outputConsumer price index (CPI): a measure of the over