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哈伯德英文版微观经济学练习c14

哈伯德英文版微观经济学练习c14
哈伯德英文版微观经济学练习c14

Microeconomics - Testbank 1 (Hubbard/O'Brien)

Chapter 14 Monopoly and Antitrust Policy

1) A monopoly is a seller of a product:

A) w ith many substitutes.

B) without a close substitute.

C) w ith a perfectly inelastic demand.

D) w ithout a a well-defined demand curve.

2) A monopolist is a seller who:

A) h as to consider the actions of other sellers.

B) i s small relative to the market.

C) c an ignore the threat of competition from other firms.

D) a ll of the above.

3) T he demand curve for the monopolist's product is:

A) t he market demand for the product.

B) m ore elastic than the market demand for the product.

C) m ore inelastic than the market demand for the product.

D) u ndefined.

4) T o keep a monopoly a firm must have:

A) a perfectly inelastic demand.

B) a n insurmountable barrier to entry.

C) m arginal revenue equal to demand.

D) a ll of the above.

5) A local electricity-generating company has a monopoly that is protected by a barrier to entry

that takes the form of:

A) c ontrol of a key raw material.

B) n etwork externalities.

C) e conomies of scale.

D) n one of the above.

6) A patent or copyright is a barrier to entry based on:

A) o wnership of a key necessary raw material.

B) l arge economies of scale as output increases.

C) g overnment action to protect one producer.

D) w idespread network externalities in supply of the good or service.

7) A public franchise is:

A) o wnership of a key necessary raw material.

B) g overnment ownership and operation of a legal monopoly.

C) g overnment designation that a private firm is the only legal producer of a good or

service.

D) a n unregulated monopoly necessary for the public good.

8) A public enterprise is:

A) a ny private business that is not-for-profit.

B) g overnment ownership and operation of a legal monopoly.

C) g overnment designation that a private firm is the only legal producer of a good or

service.

D) a n unregulated monopoly necessary for the public good.

9) G overnments grant patents to encourage:

A) r esearch and development on new products.

B) c ompetition.

C) l ow prices.

D) a ll of the above.

10) G overnments grant patents to:

A) c ompensate firms for research and development costs.

B) e ncourage competition.

C) e ncourage low prices.

D) a ll of the above.

11) F or a natural monopoly to exist:

A) a firm must continually buy up rivals.

B) a firm's long run average cost curve must exhibit diseconomies of scale.

C) a firm's long run average cost curve must exhibit economies of scale.

D) a firm must have a patent.

12) A monopolist's profit maximizing price and output is:

A) w here average total cost are smallest.

B) w here total costs are the smallest relative to price.

C) w here marginal revenue equals marginal cost and charging the price on market

demand for that output.

D) w here price is as high as possible.

13) I f a monopolist's price is $50 a unit and its marginal cost is $25, then:

A) t o maximize profit the firm should increase output.

B) t o maximize profit the firm should decrease output.

C) t o maximize profit the firm should continue to produce the output it is producing.

D) n ot enough information is given to say say what the firm should do to maximize profit.

14) I f a monopolist's marginal revenue is $35 a unit and its marginal cost is $25, then:

A) t o maximize profit the firm should increase output.

B) t o maximize profit the firm should decrease output.

C) t o maximize profit the firm should continue to produce the output it is producing.

D) n ot enough information is given to say say what the firm should do to maximize profit.

15) I f a monopolist's marginal revenue is $15 a unit and its marginal cost is $25, then:

A) t o maximize profit the firm should increase output.

B) t o maximize profit the firm should decrease output.

C) t o maximize profit the firm should continue to produce the output it is producing.

D) n ot enough information is given to say say what the firm should do to maximize profit.

16) I f a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then:

A) t o maximize profit the firm should increase output.

B) t o maximize profit the firm should decrease output.

C) t o maximize profit the firm should continue to produce the output it is producing.

D) n ot enough information is given to say say what the firm should do to maximize profit.

17) I f a monopolist's price is $50 at the output where marginal revenue equals marginal cost and

average total cost is $43, then:

A) t he firms average profit is $50.

B) t he firms average profit is $43.

C) t he firms average profit is $7.

D) N ot enough information is given to answer the question.

18) I f a monopolist's price is $50 at 63 units of output and marginal revenue equals marginal cost

and average total cost equals $43, then the firm's total profit is:

A) $3,150.

B) $2,709.

C) $441.

D) $7.

Refer to Figure 14.1 for the questions above.

Figure 14.1

19) T o profit maximize the firm in figure 14.1 will produce:

A) Q1.

B) Q2.

C) Q3.

D) Q4.

20) T he profit maximize price for the firm in figure 14.1 is:

A) P1.

B) P2.

C) P3.

D) P4.

21) I f average total costs are ATC1, the firm in figure 14.1 will:

A) s uffer a loss.

B) b reak even.

C) m ake a profit.

D) f ace competition.

22) I f average total costs are ATC2, the firm in figure 14.1 will:

A) s uffer a loss.

B) b reak even.

C) m ake a profit.

D) f ace competition.

23) I f average total costs are ATC3, the firm in figure 14.1 will:

A) s uffer a loss.

B) b reak even.

C) m ake a profit.

D) f ace competition.

24) E conomic efficiency in a market occurs when:

A) c onsumer surplus is maximized.

B) p roducer surplus is maximized.

C) c onsumer surplus plus producer surplus is maximized.

D) p rice is as low as possible.

25) A profit maximizing monopolist's price is:

A) e qual to what the price would be if the mononoplist's industry were competitive.

B) less than what the price would be if the mononoplist's industry were competitive.

C) g reater than what the price would be if the mononoplist's industry were competitive.

D) n ot consistently related to price if the market were competitive.

26) O utput under a monopoly is:

A) e qual to what output would be if the industry were competitive.

B) l ess than what output would be if the industry were competitive.

C) g reater than what output would be if the industry were competitive.

D) h as no consistent relationship to what output would be if the industry were competitive.

27) C ompared to perfect competition, under monopoly:

A) c onsumer surplus is unchanged because price and output is the same.

B) c onsumer surplus is decreased because price is higher and output is lower.

C) c onsumer surplus is increased because price is higher and output is the same.

D) c onsumer surplus is eliminated.

28) C ompared to perfect competition, a monopoly:

A) i ncreases consumer surplus.

B) c auses a deadweight welfare loss.

C) i ncreases total surplus.

D) a ll of the above.

29) C ompared to perfect competition, with monopoly:

A) c onsumer surplus is reduced.

B) o utput is reduced.

C) t otal surplus is reduced.

D) a ll of the above.

30) R elative to a perfectly competitive market, monopoly result in:

A) a gain in producer surplus is equal to the gain in consumer surplus.

B) a gain in producer surplus is equal to the loss in consumer surplus.

C) a gain in producer surplus is less than the loss in consumer surplus.

D) N one of these occur.

31) M arket power is:

A) c onsumers ability to determine what is produced or consumer sovereignty.

B) a firm being able to advertise its product and succeed in selling more output.

C) t he ability of a firm to sell at a lower price than rival sellers.

D) t he ability of a firm to charge a price higher than marginal cost.

32) T he type of firms that do not have market power are:

A) p erfectly competitive.

B) m onopolistically competitive.

C) o ligopoly.

D) m onopolies.

33) I f a firm has market power and has earned monopoly profits for some time, Joseph

Schumpeter would predict:

A) t he government will eventually have to control these firms.

B) t he public will get fed up and refuse to buy those products.

C) n ew products will drive older products and firms with market power out of the market.

D) a ll of the above.

34) T he Sherman Act prohibited:

A) m arginal cost pricing.

B) s etting price above marginal cost.

C) c ollusive price agreements among rival sellers.

D) s elling below average total cost.

35) I f Ford Motor Company and General Motors were to merge, it would be an example of a:

A) v ertical merger.

B) h orizontal merger.

C) c onglomerate merger.

D) n one of the above.

36) I f U.S. Steel and General Motors merged, this would be an example of a:

A) v ertical merger.

B) h orizontal merger.

C) c onglomerate merger.

D) n one of the above.

37) A Herfindahl-Hirschman Index is calculated by:

A) s umming the amount of sales by the four largest firms and dividing by total industry

sales.

B) d ividing the number of firms wanting to merge by the total number in the industry.

C) s umming the squares of the market shares of each firm in the industry.

D) s umming the advertising expenditure of the firms that want to merge by total industry

advertising expenditures.

38) I f a natural monopoly regulatory commission set a price where marginal cost is equal to

demand:

A) t he firm would earn monopoly profits.

B) E conomic efficiency would not be achieved.

C) t he firm would incur a loss.

D) t he firm would break even.

Refer to Figure 14.2 for the questions below.

Figure 14.2

39) T he firm in figure 14.2 wants to produce:

A) Q1.

B) Q2.

C) Q3.

D) Q4.

40) W here the firm in figure 14.2 wants to produce, the market clearing price is:

A) P1.

B) P2.

C) P3.

D) P4.

41) I f the firm in figure 14.2 produces what it wants, it will:

A) m ake a profit.

B) s uffer a loss.

C) b reak even.

D) f ace entry.

42) I f the firm in figure 14.2 is regulated to produce as much as possible, it will:

A) m ake a profit.

B) s uffer a loss.

C) b reak even.

D) f ace entry.

43) E conomic efficiency requires that a natural monopoly's price be:

A) e qual to average total cost where it intersects demand.

B) e qual to marginal cost where it intersects demand.

C) e qual to average variable cost where it intersects demand.

D) e qual to the price the natural monopolist wants.

44) T he price strategy to regulate a natural monopoly to produce as much as possible is to set

price:

A) e qual to average total cost where it intersects demand.

B) e qual to marginal cost where it intersects demand.

C) e qual to average variable cost where it intersects demand.

D) e qual to the price the natural monopolist wants.

6

6

)

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微观经济学Economics

微观经济学Economics 课程编号:020******* 课程学时:48学时 课程学分:3学分 课程概要:

参考教材: 1.金浩、高素英、孙丽文,微观经济学(理工科),南开大学出版社,2 004 2.朱善利,微观经济学(第二版),北京大学出版社,2001 3.高鸿业,西方经济学(第四版),中国人民大学出版社,2000 4.哈伯德,奥布赖恩,经济学(微观),机械工业出版社,2007 5.黎诣远,微观经济分析,清华大学出版社,2000 6.曼昆,经济学原理(第四版),北京大学出版社,2006 7.Walter Nicholson,微观经济理论——基本原理与扩展(第九版),北京大学出版社,2005 8.萨缪尔森、诺德豪斯,经济学(第17版),人民邮电出版社,2004 9 .Robert S. Pindyck, Daniel L. Rubinfeld,Microeconomics(Fifth Edition),清华大学出版社,2001 10.James D. Gwartney ect.,Economics: Private and Public Choice,立信出版社,2002

11.Joseph A. Schumpeter,History of Economic Analysis (Eleventh Printing), Oxford University Press, Inc, 1980 12.Hugh Gravelle and Ray Rees,Microeconomics (Third Edition), 上海财经大学出版社,2006 其他要求:上课过程中必须关闭手机;不许迟到、早退;课后认真完成作业。 成绩评定:成绩主要分为两个部分:平时成绩(出勤、作业)占20%,其中作业占10%,考勤占10分(随机点名5次,每次2分);期末考试占8 0%,无期中考试。平时出勤少于30%得不允许参加考试。

微观经济学期末考试试卷(含答案)

西方经济学(微观部分)期末考试试卷(A卷)考试科目:微观经济学 考试类型:(闭卷)考试时间:120 分钟学号姓名年级专业 一、单项选择题(每题0.5分,共15分,将正确答案填入答题纸上) 1.看不见的手一般指() A、机会成本 B、政府 C、利润 D、价格 2.经济学中的“稀缺性”是指() A 世界上大多数人生活在贫困中B、相对于资源的需求而言,资源总是不足的C用资源必须考虑下一代 D、世界上的资源终将被人类消耗光 3.如果x与y商品是互补品,x价格下降,将使y() A、需求量增加 B、需求增加 C、需求量减少 D、需求减少 4.冰棒的需求价格弹性()药品的需求价格弹性 A、大于 B、小于 C、等于 D、大于或等于 5.下列命题中哪个是规范经济学的命题?( ) A.征税对中等收入家庭是不公平的 B. 1982年8月政府把贴现率降到10% C. 1981年失业率超过9% D.社会保险税的课税依据现已超过30000美元 6.如果消费者的预算收入为50美元,商品X和Y的价格均为5美元,消费者打算购买6单位X和4单位Y,商品X、Y的边际效用分别为25和20,那么,要达到效用最大化,他应该() A、按原计划购买 B、减少X和Y的购买量 C、增加X、Y的购买量 D、增加X的同时减少Y的量 7.消费者预算线发生平移时,连接消费者均衡点的曲线称为() A、需求曲线; B、价格-消费曲线; C、收入-消费曲线; D、恩格尔曲线。

8.当某人面对一张彩票时,如果是212111UW P W PU W P PW U )()(])([-+?-+,则意味着这个人是属于下列哪一类人 ( ) A .风险回避者 B .风险喜爱者 C .风险中立者 D .都不是 9.如果某厂商增加一单位劳动使用量能够减少三单位资本, 而仍生产同样的产出量,则MRTS LK 为:( ) A 1/3 B 3 C -3 D 6 10. MC 曲线达到最低时( ) A MP 最大 B AV C 最小 C TC 最大 D AC 最小 11.某厂商每年从企业的总收入中取出一部分作为自己所提供的生产要素的报酬,这部分资金被视为( )。 A 、显成本; B 、隐成本; C 、会计成本 D 、经济利润。 https://www.sodocs.net/doc/3c3598970.html,C 曲线( )。 A 当LMC <LAC 时下降,而当LMC >LAC 时上升 B 随LM C 曲线下降而下降 C .随LMC 曲线上升而上升 D.通过LMC 曲线的最低点 13. 在完全竞争市场中,( )。 A 消费者是价格接受者,而企业不是 B 消费者和企业都不是价格接受者 C 消费者和企业都是价格接受者 D 企业是价格接受者,而消费者不是 14.一个企业在以下哪种情况下应该关闭?( ) A P <AVC B P <SAC C 发生亏损时 D SMC >MR 15.短期内,完全竞争厂商只能通过对( )调整来实现最大利润。 A.生产规模 B.价格 C.全部生产要素 D.产量 16. 完全竞争厂商的短期供给曲线应该是( ) A 曲线上超过平均成本最低点的部分 B 曲线上超过收支相抵点的部分 C 曲线上的停止营业点和超过停止营业点以上的部分 D 曲线上的收支相抵点和超过收支相抵点以上的部分 17.下列哪一种情况对单一价格垄断者是不正确的?( ) A. 由于只有一个企业,企业的需求就是行业的需求 B. 由于没有替代品,需求缺乏弹性 C. 平均收益曲线就是需求曲线 D. 边际收益小于价格 18.寡头垄断和垄断竞争之间的主要区别是( )。 a.厂商的广告开支不同 b.非价格竞争的种类不同 c.厂商之间相互影响的程度不同 d.以上都不对 19. 下列那一个不是垄断竞争的特征( ) A.厂商数目很少 B.进出该行业容易 C.存在产品差别 D.厂商忽略竞争对手的反应

曼昆微观经济学英文版课后练习题第一章

曼昆微观经济学英文版课后练习题第一章

————————————————————————————————作者:————————————————————————————————日期: 1

1 Chapter 1 Ten Principles of Economics Multiple Choice 1. The word that comes from the Greek word for "one who manages a household" is a. market. b. consumer. c. producer. d. economy. ANS: D DIF: 1 REF: 1-0 TOP: Economy MSC: Definitional 2. The word “economy” comes from the Greek word oikonomos , which means a. “environment.” b. “production.” c. “one who manages a househol d.” d. “one who makes decisions.” ANS: C DIF: 1 REF: 1-0 TOP: Economy MSC: Definitional 3. Resources are a. scarce for households but plentiful for economies. b. plentiful for households but scarce for economies. c. scarce for households and scarce for economies. d. plentiful for households and plentiful for economies. ANS: C DIF: 1 REF: 1-0 TOP: Resources, Scarcity MSC: Interpretive 4. Economics deals primarily with the concept of a. scarcity. b. poverty. c. change. d. power. ANS: A DIF: 1 REF: 1-0 TOP: Scarcity MSC: Definitional 5. Which of the following questions is not answered by the decisions that every society must make? a. What determines consumer preferences? b. What goods will be produced? c. Who will produce the goods? d. Who will consume the goods? ANS: A DIF: 2 REF: 1-0 TOP: Economies MSC: Interpretive 6. The overriding reason as to why households and societies face many decisions is that a. resources are scarce. b. goods and services are not scarce. c. incomes fluctuate with business cycles. d. people, by nature, tend to disagre e. ANS: A DIF: 2 REF: 1-0 TOP: Scarcity MSC: Interpretive 7. The phenomenon of scarcity stems from the fact that a. most economies’ production methods are not very good. b. in most economies, wealthy people consume disproportionate quantities of goods and services. c. governments restricts production of too many goods and services. d. resources are limited. ANS: D DIF: 2 REF: 1-0 TOP: Scarcity MSC: Interpretive

微观经济学试卷及答案

微观经济学试卷及答案

C.水稻 D.汽车 1.在完全竞争长期均衡中,如果企业成本不变,市场供给量的增加( ) A.全部来自原有企业 B.全部来自新增企业 C.部分来自原有企业,部分来自新增企业 D.以上三种情况都有可能 2.在完全价格歧视下,() A.需求曲线变成了边际收益曲线 B.需求曲线变成了总收益曲线 C.边际成本曲线变成了边际收益曲线 D.边际成本曲线变成了总收益曲线 3.当生产的产品价格上升时,作为在竞争性市场中一个追求利润最大化的厂商而言,对劳动的需求曲线将() A.左移 B.右移 C.变平坦 D.不受影响 4.下列各种成本中,哪条成本曲线的变动规律是向右下方倾斜( ) A.平均固定成本

B.平均可变成本 C.短期边际成本 D.短期总成本 5.厂商在短期均衡产量上,如果AR小于SAC,但大于A VC,则厂商() A.亏损,但继续生产 B.亏损,立即停产 C.获利,继续生产 D.亏损,生产与否都可 6.下列关于洛伦兹曲线和基尼系数的论述,错误的是() A.洛伦兹曲线弯曲程度越大,基尼系数越大 B.基尼系数越大,说明收入分配越不公平 C.洛伦兹曲线越靠近对角线,说明基尼系数越大D.洛伦兹曲线和基尼系数都是描述收入分配公平程度的指标 7.商品X、Y的价格按相同的比例上升,而收入不变,预算线() A.向左下方平行移动 B.向右下方平行移动 C.不变动 D.转动 8.生产可能性边界图形的轴线用于衡量()

A.生产性投入或资源的数量 B.产成品的数量 C.产成品的价值 D.上述答案均正确 9.如果边际成本在一定产量范围内大于平均成本,则在该范围内,产量的增加都将促使平均成本()A.升高 B.降低 C.升高或降低取决于可变成本的变化 D.保持不变 10.假定某歌唱演员的年薪为10万元,但他(她)从事其他职业最多只能得到3万元,则这个演员所获得的经济租金为() A.10万元 B.3万元 C.7万元 D.13万元 11.帕累托最优配置是指() A.总产量达到最大 B.边际效用达到最大 C.消费者得到他们想要的所有东西 D.没有一个人可以在不使任何他人境况变坏的条件下使得自己境况变得更好

曼昆微观经济学课后练习英文答案(第七章)

rkets WHAT’S NEW IN THE SIXTH EDITION: There are no major changes to this chapter. LEARNING OBJECTIVES: By the end of this chapter, students should understand: the link between buyers’ willingness to pay for a good and the demand curve. how to define and measure consumer surplus. the link between sellers’ costs of producing a good and the supply curve. how to define and measure producer surplus. that the equilibrium of supply and demand maximizes total surplus in a market. CONTEXT AND PURPOSE: Chapter 7 is the first chapter in a three-chapter sequence on welfare economics and market efficiency. Chapter 7 employs the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. These concepts are then 7 CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS

微观经济学试卷及答案

微观经济学试卷一 一、单项选择题(每题2分,共30分) 1.资源稀缺是指()。 A.世界上大多数人处于贫困之中B.相对于人们的欲望而言,资源是不足的 C.资源要保留给我们的未来D.资源最终会被耗光 2.已知某商品的需求函数和供给函数分别为:QD=14-3P,QS=2+6P,该商品的均衡价格是()。A.4/3 B.4/5 C.2/5 D.5/2 3.总效用曲线达到顶点时() A.边际效用曲线达到最大点B.边际效用为零 C.边际效用为正D.边际效用为负 4.假定某企业全部成本函数为TC=30000+5Q-Q2,Q为产出数量。那么TVC为()A.30000 B.5Q-Q2 C.5-Q D.30000/Q 5.生产要素的需求曲线之所以向右下方倾斜,是因为() A.要素的边际产品价值递减B.要素生产的产品的边际效用递减 C.要素参加生产的规模报酬递减D.以上均不正确 6.在完全竞争市场上() A.产品有差别B.产品无差别C.有的有差别,有的无差别D.以上说法都对7.完全竞争市场的厂商短期供给曲线是指() A.A VC >SMC中的那部分A VC曲线B.AC > SMC中的那部分AC曲线 C.SMC≥A VC那部分SMC曲线D.SMC≥AC那部分SMC曲线 8.已知一元钱的边际效用为3个单位,一支钢笔的边际效用为36个单位,则消费者愿意花()购买这支钢笔A.12元B.36元C.3元D.108元 9.一般来说,香烟的蛛网形状是() A.收敛型B.发散型C.封闭型D.不确定 10.已知X、Y两种商品的交叉弹性为1.8,则这两种商品为 A.独立品B.替代品C.补充品D.不能确定 11.如果商品的需求弹性为0.6供给弹性为1.5,则销售税() A.主要由消费者承担B.主要由生产者负担 C.由生产者和消费者均等地负担D.全部由生产者负担 12.某旅游景点,对一般参观者门票为50元,对中小学生门票为25元,这种价格策略为( )。A.一级差别价格B.二级差别价格C.三级差别价格D.无差别价格13.当X商品的价格下降时,替代效应=+2,收入效应=-1,则该商品很可能是()。A.正常商品B.一般低档商品C.吉芬商品D.奢侈品 14.已知某商品的需求量增加80%,而同期消费者的收入却增加了40%,则该商品很可能是()。A.必需品B.奢侈品C.一般低档商品D.吉芬商品15.已知某商品的需求价格弹性为1.2,供给价格弹性为1,则价格波动形成的蛛网形状是()。A.收敛型B.发散型C.封闭型D.不能确定 二、名词解释(每题5分,共40分) 1.需求的价格弹性(Price elasticity of demand) 2.边际效用(Marginal Utility) 3.消费者均衡(Consumer`s equilibrium) 4.无差异曲线(Indifference curve) 5.吉芬物品(Giffen good)

曼昆微观经济学第四版关键概念中英文对照

微观经济学关键概念中英文对照 CHAPTER 1 scarcity稀缺性 economics经济学 efficiency效率 equity平等 opportunity cost机会成本 rational people理性人 marginal changes边际变动 incentive激励 market economy市场经济 property rights产权 market failure市场失灵 externality外部性 market power市场势力 productivity生产率 inflation通货膨胀 business cycle经济周期

CHAPTER 2 circular-flow diagram循环流向图production possibilities frontier生产可能性边界 microeconomics微观经济学 macroeconomics宏观经济学 positive statements实证表述 normative statements规范表述 CHAPTER 3 absolute advantage绝对优势 opportunity cost机会成本 comparative advantage比较优势 imports进口 exports出口 CHAPTER 4 market市场 competitive market竞争市场 quantity demanded需求量 law of demand需求定理 demand schedule需求表 demand curve需求曲线

normal good正常物品 inferior good低档物品 substitutes替代品 complements互补品 quantity supplied供给量 law of supply供给定理 supply schedule供给表 supply curve供给曲线 equilibrium均衡 equilibrium price均衡价格 equilibrium quantity均衡数量 surplus过剩 shortage短缺 law of supply and demand供求定理 CHAPTER 5 elasticity弹性 price elasticity of demand需求价格弹性 total revenue总收益 income elasticity of demand需求收入弹性cross-price elasticity of demand需求的交叉价格弹性price elasticity of supply供给价格弹性

曼昆的《微观经济学原理》课业笔记 英文版

Ch 1 Ten Principles of economic ?Scarcity: the limited nature of society’s resources ?Economics: the study of how society manages its scarce resources, e.g. ?There are 10 principle of economic which are needed to be remember throughout. ?People face trade-off 1. Individual(time,money) and society(efficiency vs equality). ?Cost of something is what your give up to get it.\ 1. The opportunity cost of any item is whatever must be given up to obtain it. ?Rational people thinking at margin(effect of one additional item) 1. This principle assume that everyone is rational people(made their decision base on their interests) this was addressed on Adam Smith's Wealth of Nation. ?People respond to incentives(诱惑物) 1. This statement reveals that human psychology is a important feature in economic study. ?Trade can make everyone better-off 1.Ex: trade of agricultural product and technology between Japan and America, it will break the law of PPF. It involved absolute advantages(low input) and comparative advantage(low opportunity cost win) ?Markets are usually a good way to organize economy activity. 1.Markets can balance the price. ?Government can sometime improve market outcome. ? A country's standard of living depends on its ability to produce goods and services. ?Price rise when government print too much money.

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