TAILIEUCHUNG - Lecture Economics: Chapter 1 - Dean Karlan, Jonathan Morduch

Chapter 1 - The power of economics. In this chapter you will learn: Explain the economic concept of scarcity, explain the economic concepts of opportunity cost and marginal decision making, explain the economic concept of incentives, explain the economic concept of efficiency, distinguish between correlation and causation, list the characteristics of a good economic model, distinguish between positive and normative analysis. | Chapter 1 The Power of Economics © 2014 by McGraw‐Hill Education 1 What will you learn in this chapter? • Concepts of – Scarcity. – Opportunity cost and marginal decision making. – Incentives. – Efficiency. • How to distinguish between – correlation and causation. – Positive and normative analysis. • Characteristics of good economic modeling. © 2014 by McGraw‐Hill Education 2 What is economics? • Economics is the study of how people manage resources. • Decisions made by individuals and also by groups. • Resources are both physical objects and intangibles such as time. • Economics is divided into two broad fields: – Microeconomics: study of individuals and firms. – Macroeconomics: study of the economy on a regional, national, or international scale. © 2014 by McGraw‐Hill Education 3 1 Choices and rational behavior • Economists assume that people – Compare all available choices. – Purposefully behave in the way that will best achieve their goals, called rational behavior. • Peoples’ decisions can be studied using four main questions: 1. What are their wants and constraints? 2. What are their trade‐offs? 3. How will others respond? 4. Why isn’t everyone doing it? © 2014 by McGraw‐Hill Education 4 Scarcity • People make decisions aimed at getting the things they want. • People want a lot of things, but they are constrained by limited resources. • Scarcity is the condition of peoples’ wants being greater than available resources. – Individuals’ resources: time and money. – Societies’ resources: factors of production, such as labor and technology. © 2014 by McGraw‐Hill Education 5 Opportunity cost • Every decision in life involves weighing the trade‐ off between costs and benefits. – Rational behavior dictates that when people choose between two things, the one with the greatest net benefit (benefits minus costs) is chosen. • The benefits are often easily calculated. • The costs include both the direct cost and opportunity cost. – .

• Kinh tế học
• Lecture Economics
• Public economics
• Economic growth
• Kinh tế học
• Opportunity cost
• Circular flow diagram
• Business economics
• Lecture Business economics
• Business applications of economics
• Open economy
• Competitive markets
• Economic Models
• Economics of agriculture
• Development economics
• Lecture Development economics
• Kinh tế phát triển
• Developing nations
• Economics of agricultural development
• Principles of economics
• Managerial economics
• Lecture Managerial economics
• Market interactions
• Fundamentals of managerial economics
• Marginal analysis
• Marginal benefit
• Lecture Principles of economics
• Ten principles of economics
• People face tradeoffs
• Marginal changes
• Element of economics
• Lecture Element of economics
• Economic systems
• Economics problems
• Macroeconomic issues
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Economic principles
• Economic policies
• Economics of farm policy
• Farm policy
• Social issues
• Economics of social issues
• Lecture Economics of social issues
• Economics of crime
• Classification of criminal acts
• The costs of crime
• Economics of education
• Increased demand for education
• Educational expenditures
• Monopoly power
• Economics of monopoly power
• Professional sports
• Economics of professional sports
• Professional sports business
• Issues in economics today
• Lecture Issues in economics today
• International issues
• Price control issues
• Economics of children
• Foreign markets
• Monopolistic competition
• Macroeconomic policy
• Supply curve
• Elasticity of demand