Professional Documents
Culture Documents
Course Assessment:
Quizzes: Minimum 5 quizzes
Mid Term
Final
Project
10 Marks
30 points
40 points
20 Marks
0300-3610026
Yahoo group name :
sirsalmanahmedmicroeconomics
Groupmail : sirsalmanahmedmicroeconomics @yahoogroups.com
N Gregory Mankiw
CHAPTER 1
CHAPTER 1
Principle
Principle #1:
#1: People
People Face
Face Tradeoffs
Tradeoffs
All decisions involve tradeoffs. Examples:
Principle
Principle #1:
#1: People
People Face
Face Tradeoffs
Tradeoffs
Principle
Principle #2:
#2: The
The Cost
Cost of
of Something
Something Is
Is What
What
You
You Give
Give Up
Up to
to Get
Get ItIt
CHAPTER 1
Principle
Principle #2:
#2: The
The Cost
Cost of
of Something
Something Is
Is What
What
You
You Give
Give Up
Up to
to Get
Get ItIt
Examples:
The opportunity cost of
going to college for a year is not just the tuition,
books, and fees, but also the foregone wages.
seeing a movie is not just the price of the ticket,
but the value of the time you spend in the theater.
CHAPTER 1
Principle
Principle #3:
#3: Rational
Rational People
People Think
Think at
at the
the
Margin
Margin
Principle
Principle #3:
#3: Rational
Rational People
People Think
Think at
at the
the
Margin
Margin
Examples:
Principle
Principle #4:
#4: People
People Respond
Respond to
to Incentives
Incentives
ACTIVE LEARNING
Exercise
1:
ACTIVE LEARNING
Answers
1:
ACTIVE LEARNING
Answers
1:
Observations:
16
The next
three principles
deal with how people
interact.
CHAPTER 1
Principle
Principle #5:
#5: Trade
Trade Can
Can Make
Make Everyone
Everyone Better
Better
Off
Off
produce
buy other goods more cheaply from abroad
than could be produced at home
CHAPTER 1
Principle
Principle #6:
#6: Markets
Markets Are
Are Usually
Usually A
A Good
Good Way
Way
to
to Organize
Organize Economic
Economic Activity
Activity
Principle
Principle #6:
#6: Markets
Markets Are
Are Usually
Usually A
A Good
Good Way
Way
to
to Organize
Organize Economic
Economic Activity
Activity
CHAPTER 1
Principle
Principle #6:
#6: Markets
Markets Are
Are Usually
Usually A
A Good
Good Way
Way
to
to Organize
Organize Economic
Economic Activity
Activity
Principle
Principle #7:
#7: Governments
Governments Can
Can Sometimes
Sometimes
Improve
Improve Market
Market Outcomes
Outcomes
CHAPTER 1
Principle
Principle #7:
#7: Governments
Governments Can
Can Sometimes
Sometimes
Improve
Improve Market
Market Outcomes
Outcomes
Principle
Principle #7:
#7: Governments
Governments Can
Can Sometimes
Sometimes
Improve
Improve Market
Market Outcomes
Outcomes
CHAPTER 1
A C T I V E L E A R N I N G 2:
Discussion Questions
In each of the following situations, what is the
governments role? Does the governments
intervention improve the outcome?
a. Public schools for population
b. Workplace safety regulations
c. Public highways
d. Patent laws, which allow drug companies to
charge high prices for life-saving drugs
25
CHAPTER 1
Principle
Principle #8:
#8: A
A countrys
countrys standard
standard of
of living
living
depends
depends on
on its
its ability
ability to
to produce
produce goods
goods &
&
services.
services.
CHAPTER 1
Principle
Principle #8:
#8: A
A countrys
countrys standard
standard of
of living
living
depends
depends on
on its
its ability
ability to
to produce
produce goods
goods &
&
services.
services.
Principle
Principle #9:
#9: Prices
Prices rise
rise when
when the
the
government
government prints
prints too
too much
much money.
money.
Principle
Principle #10:
#10: Society
Society faces
faces aa short-run
short-run
tradeoff
tradeoff between
between inflation
inflation and
and unemployment
unemployment
CHAPTER 1
CONCLUSION
Economics offers many insights about the
behavior of people, markets, and economies.
CHAPTER 1
CHAPTER SUMMARY
The principles of decision making are:
CHAPTER 1
CHAPTER SUMMARY
The principles of interactions among people are:
CHAPTER 1
CHAPTER SUMMARY
The principles of the economy as a whole are:
CHAPTER 1