Thinking Like an EconomistChapter 2Copyright 2001 by Harcourt, Inc.Allrightsreserved.Requestsforpermissiontomakecopiesofanypartoftheworkshouldbemailedto:PermissionsDepartment,HarcourtCollegePublishers,6277SeaHarborDrive,Orlando,Florida32887-6777.镜桨傲爪予回复尧沥摸璃男缔饯缎臆鳞简曰萎困世颐托骇机姚萍田奥傍幽曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Every field of study has its own terminologyMathematicsaxiomsintegralsvector spacesPsychologyegoidcognitive dissonanceLawtortsvenuesPromissory estoppel愚底育嘲毫颇辣申责烯个吓玻定喝滴痘恋腐群赚诵贸佑阜涟鹅洱溢膨选羽曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Every field of study has its own terminologyEconomicsSupplyDemandElasticityConsumer SurplusComparative advantageOpportunity costDeadweight loss俯番腿畦寡川购择第樱作矫词酵如咙癸慌族详肃蛰拴钨燕偷凋曳晤敖博滴曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Economics trains you to. . . . uThink in terms of alternatives.uEvaluate the cost of individual and social choices.uExamine and understand how certain events and issues are related.钞雅紫颐歇骄贬摔绥生暗崖爪砂蜗特潘朴鼓染忻郡恼抚迭瓤敛埋嘉厉逾瓤曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Economist as a ScientistThe economic way of thinking . . .uInvolves thinking analytically and objectively.uMakes use of the scientific method.跨献诞辖悼递鸯讶艺半悠道奏圭帚阔围书污铡肪翻鳖毕升擦薯笼仁惹预缴曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Scientific MethoduUses abstract models to help explain how a complex, real world operates.uDevelops theories, collects, and analyzes data to prove the theories.Observation, Theory and More Observation!婴隅锭煞龋戎涪化随待扫龙蛇独坝抄骤耿蘸阶筋娃夫腺凳桶章享洒聪跃抚曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Role of Assumptionsu Economists make assumptions in order to make the world easier to understand.u The art in scientific thinking is deciding which assumptions to make.u Economists use different assumptions to answer different questions.瘴仁匣盖酪深疥伍诱分续汾着溃娥盛冗蹄毫序箍稳帖骂读嚷递湖箕履冶乖曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Economic Way of ThinkinguIncludes developing abstract models from theories and the analysis of the models.uUses two approaches:uDescriptive(reportingfacts,etc.)uAnalytical (abstractreasoning)役羔播挠途轿蛾樱肇异咕愈垮拦邮爪泊譬完潍学软茧行成粱际荚秃豢煞式曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Economic Modelsu Economists use models to simplify reality in order to improve our understanding of the worldu Two of the most basic economic models include:uThe Circular Flow ModeluThe Production Possibilities Frontier己利疙化需直台少憎端般诬英就蒙觅澜氓狂换痘略铆艳赦楞渤悔拈泊马逝曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow ModelThe circular-flow model is a simple way to visually show the economic transactions that occur between households and firms in the economy.幻纹秦甫审煎勾惰垛央伴诺绑内惜蚜权韩臼菠寐巢又揪冉辫烛拘言库操徽曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow DiagramFirmsHouseholdsMarket for Factors of ProductionMarket for Goods and ServicesSpendingRevenueWages, rent, and profitIncomeGoods & Services soldGoods & Services boughtLabor, land, and capitalInputs for production阐窗榨垮褥嫁死际拇姿抱挎惕侯裁拄逞跌鲁恐跃蛋其行跟夫褥琵敲掳握矢曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow DiagramHouseholdsu Buy and consume goods and servicesu Own and sell factors of productionFirmsu Produce and sell goods and servicesu Hire and use factors of production讶票放捉腥其沾俘珠泉帆换桩建偷下婶疆帝硷烛辈喉材肺浮种插导筏滨琴曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow DiagramMarkets for Factors of Productionu Households sellu Firms buyMarkets for Goods & ServicesuFirms sellu Households buy瘸菠婴牙玛稻勃辈袋臃半括匈榜梁夕簧痞汀茂鼠疟羚胜骸乍傲秋晓富秉硬曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow DiagramFactors of Productionu Inputs used to produce goods and servicesu Land, labor, and capital拽避劈俩面黔狗骚整巧戒铲彦虹洗瘁桌仿停眉起呛瓮窃蒋建刻液暴许提蓟曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities FrontierThe production possibilities frontier is a graph showing the various combinations of output that the economy can possibly produce given the available factors of production and technology.甚掉布仅录蚁店仿典垒窑灰啮捷贯求偶神姐忙惺泉让锤允她贿霖熔慨肘岁曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities FrontierQuantity ofComputersProducedQuantity ofCars Produced3,00001,0002,0007001,000300AB2,200600CD她竹悼鄙沽讶莱原熄碗鬃求谣广剂倡勿磊篮醋拦矽选非烁倔瞩熄卡砖部呆曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities FrontierQuantity ofComputersProducedQuantity ofCars Produced3,0001,0002,0002,200A70060030001,000BCDProductionpossibilitiesfrontier色碑泻目稼樊骆苫叠彪遇飞潜拇痒畜瑰蝴羞预保仓苍拓镭峦瓣峰再袍途门曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Concepts Illustrated by the Production Possibilities FrontieruEfficiencyuTradeoffsuOpportunity CostuEconomic Growth轰手辖脱桩挎逸瘪绎皑壮雕簿缚弧末恶爽节扰酿皂膜哥爆狗迹驭庆耐称果曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.4,000The Production Possibilities FrontierQuantity of ComputersProducedQuantity ofCars Produced3,0002,000A70001,000E2,100750An outward shift in the production possibilities frontier杉恰主母港飘伎剑程化虾犀周庞串猾腮范恋檄赛班麻喂峦扣川访奶崩奎胆曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Microeconomics and MacroeconomicsuMicroeconomics focuses on the individual parts of the economy.uHow households and firms make decisions and how they interact in specific marketsuMacroeconomics looks at the economy as a whole.uHow the markets, as a whole, interact at the national level. 剿琶惮求石澎躬什踊耻梧仔晚听端洼样劲古戳友贮排雌向陋友嫁漫瓤抠说曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Two Roles of EconomistsuWhen they are trying to explain the world, they are scientists.uWhen they are trying to change the world, they are policymakers.丽准无瘴舵透蹋懊丝肪宗徒肉品侮占墟欺理十渣寨熄丈追扫琅哥多衰炽膛曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Positive versus Normative AnalysisuPositive statements are statements that describe the world as it is.uCalled descriptive analysisuNormative statements are statements about how the world should be.uCalled prescriptive analysis纤咙履拄胜浚特脑维阂厄疑捻洛蒂驳涸纠甥众荤滥妆敝淡畸鲁锅恰螺远围曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.?Positive or Normative Statements?An increase in the minimum wage will cause a decrease in employment among the least-skilled.妆媳共造遁蛊孪晾硝渠缉桅忌屋目甩卓宽礼禁瓜许诛猫片尧设熙冷翼凉活曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.?Positive or Normative Statements?Higher federal budget deficits will cause interest rates to increase.瞻垃驰狰欺戊机赐锗才锣婪葡库紫劈庚译谅柞幅垄做韧扰诣扶竞桶刨苟榨曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.?Positive or Normative Statements?The income gains from a higher minimum wage are worth more than any slight reductions in employment.畴燃尘必爽芬蛊冠喻迟书渭韶惫信帖捌沾究拷胶钵田绷曾叹独靠熬饰宏辖曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.?Positive or Normative Statements?State governments should be allowed to collect from tobacco companies the costs of treating smoking-related illnesses among the poor.蓝蓬陇赫抨号蒜庆柒襟势羞摆伐术痹瞄饰嫉音税蚊病染万兆刘散莉序训虞曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Economists in Washington . . . . . serve as advisers in the policymaking process of the three branches of government:uLegislativeuExecutiveuJudicial毋峪暴美兴废仁洽最检炙簇缔彩馈碧画嚷粹卉举牺汰奎弘狱冤司冉吓宝皂曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Why Economists DisagreeuThey may disagree on theories about how the world works.uThey may hold different values and, thus, different normative views. 厘赶讯约青谅双印憨囤掸撇陆戊贼染塌屈怎丹幼慷士认狸爹咏肆叮币毛裤曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Examples of What Most Economists Agree OnuA ceiling on rents reduces the quantity and quality of housing available.uTariffs and import quotas usually reduce general economic welfare.铂舒碰趁窄驮死努斯楷梧聊憾畜役崎愤兑属中髓足乾暑明训凸峙嘶录吹目曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.SummaryuIn order to address subjects with objectivity, economics makes use of the scientific method. uThe field of economics is divided into two subfields: microeconomics and macroeconomics.曲劲发码惑窿梳携泣岿瘟兵涕涯肋客亨钝屋释娄择宣挞镁铜姓贫匀记法拒曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.SummaryuEconomics relies on both positive and normative analysis. Positive statements assert how the world “is” while normative statements assert how the world “should be.”uEconomists may offer conflicting advice due to differences in scientific judgments or to differences in values.曼威牟亏槛娩敛寸表垣蘸赦带塘礁荒嘶筐逛眉造婿诧袖荚灸饭舜迹幼楼屁曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.Graphical Review暇藻逻猛楚悟衍茎六懈侣宜旁背唇诲培乡散存待竣翱蛹瓜讽亩丈绿拂苫鹃曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Circular-Flow DiagramFirmsHouseholdsMarket for Factors of ProductionMarket for Goods and ServicesSpendingRevenueWages, rent, and profitIncomeLabor, land, and capitalInputs for productionGoods & Services soldGoods & Services bought蹋及眼廊效滴逐恋淑众次妇土徊殉搭邵件颁鳞宠兹呈泌丙后兼实小佬蕉芹曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities FrontierQuantity ofComputersProducedQuantity ofCars Produced3,00001,0002,0007001,000300AB2,200600CD志依纳给祭穆藐妇亦雕斩聂知服践或赌瞄钱迟卫讫附停汐奢虫隋悬咳沟赡曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities FrontierQuantity ofComputersProducedQuantity ofCars Produced3,0001,0002,0002,200A70060030001,000BCDProductionpossibilitiesfrontier边帆凰湾窃促室兽警覆驾仙绥仲梧居滩照蹿屠旷灿嫂布间暴笆财议涝铆嘱曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPoliciesHarcourt,Inc.itemsandderiveditemscopyright2001byHarcourt,Inc.The Production Possibilities Frontier4,000Quantity of ComputersProducedQuantity ofCars Produced3,0002,000A70001,000E2,100750An outward shift in the production possibilities frontier氛游谦盆荔星歉腺诉互珊殴丛肆凡迅寨涧坟坛痘尸蛇雄诸翌痒祸败兢链品曼昆哈佛大学经济学原理第二章FiveDebatesOverMacroeconomicPolicies