曼昆经济学原理复习资料.docx

1、曼昆经济学原理复习资料1Q4Why should policy makers think about incentivesPolicymakers need to think about incentives so they can understand how people will respond to the policies they put in place. The texts example of seat belts shows that policy actions can have quite unintended consequences. If incentives m

2、atter a lot, they may lead to a very different type of policy; for example, some economists have suggested putting knives in steering columns so that people will drive much more carefully! While this suggestion is silly, it highlights the importance of incentives.Q6what does the invisible hand of th

3、e marketplace doThe invisible hand of the marketplace represents the idea that even though individuals and firms are all acting in their own self-interest, prices and the marketplace guide them to do what is good for society as a whole.2Q1How is economics like a scienceEconomics is like a science be

4、cause economists use the scientific method. They devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories about how the world works. Economists use theory and observation like other scientists, but they are limited in their ability to run controlled

5、 experiments. Instead, they must rely on natural experiments.Q5 Use a production possibilities frontier to describe the idea of “efficiency”The idea of efficiency is that an outcome is efficient if the economy is getting all it can from the scarce resources it has available. In terms of the producti

6、on possibilities frontier, an efficient point is a point on the frontier, such as point A in Figure 4. A point inside the frontier, such as point B, is inefficient since more of one good could be produced without reducing the production of another good.Q7What is the difference between a positive and

7、 a normative statement Give an example of that.Positive statements are descriptive and make a claim about how the world is, while normative statements are prescriptive and make a claim about how the world ought to be. Here is an example. Positive: A rapid growth rate of money is the cause of inflati

8、on. Normative: The government should keep the growth rate of money low.3Q1 Explain how absolute advantage and comparative advantage differ.Absolute advantage reflects a comparison of the productivity of one person, firm, or nation to that of another, while comparative advantage is based on the relat

9、ive opportunity costs of the persons, firms, or nations. While a person, firm, or nation may have an absolute advantage in producing every good, they cant have a comparative advantage in every good.Q4Will a nation tend to export or import goods to Question2.A nation will export goods for which it ha

10、s a comparative advantage because it has a smaller opportunity cost of producing those goods. As a result, citizens of all nations are able to consume quantities of goods that are outside their production possibilities frontiers.4Q5Propeyes income declines, and as a result, he buys more spinach. Is

11、spinach an inferior or a normal goods What happens to Popeyes demand curve for spinachSince Popeye buys more spinach when his income falls, spinach is an inferior good for him. Since he buys more spinach, but the price of spinach is unchanged, his demand curve for spinach shifts out as a result of t

12、he decrease in his income.Q8 Dose a change in producers technology lead to a movement along the supply curve Does a change in price lead to a movement along the supply curve or a shift in the supply curve A change in producers technology leads to a shift in the supply curve. A change in price leads

13、to a movement along the supply curve.Q9 Define the equilibrium of a market. Describe the forces that move a market towards its equilibrium.The equilibrium of a market is the point at which the quantity demanded is equal to quantity supplied. If the price is above the equilibrium price, sellers want

14、to sell more than buyers want to buy, so there is a surplus. Sellers try to increase their sales by cutting prices. That continues until they reach the equilibrium price. If the price is below the equilibrium price, buyers want to buy more than sellers want to sell, so there is a shortage. Sellers c

15、an raise their price without losing customers. That continues until they reach the equilibrium price.Q11 Describe the role of prices in market economies.Prices play a vital role in market economies because they bring markets into equilibrium. If the price is different from its equilibrium level, qua

16、ntity supplied and quantity demanded are not equal. The resulting surplus or shortage leads suppliers to adjust the price until equilibrium is restored. Prices thus serve as signals that guide economic decisions and allocate scarce resources.5Q2 List and explain the four determinants of the price el

17、asticity of demand discussed in the chapter.The determinants of the price elasticity of demand include how available close substitutes are, whether the good is a necessity or a luxury, how broadly defined the market is, and the time horizon. Luxury goods have greater price elastic ties than necessit

18、ies, goods with close substitutes have greater elastic ties, goods in more narrowly defined markets have greater elastic ties, and the elasticity of demand is higher the longer the time horizon.Q4 On a supply-and-demand diagram, show equilibrium price, equilibrium quantity, and the total revenue rec

19、eived by producers.Figure 1 presents a supply-and-demand diagram, showing equilibrium price, equilibrium quantity, and the total revenue received by producers. Total revenue equals the equilibrium price times the equilibrium quantity, which is the area of the rectangle shown in the figure.Figure 16Q

20、2Which causes a shortage of a gooda price ceiling or a price floor Which causes a surplusA shortage of a good arises when there is a binding price ceiling. A surplus of a good arises when there is a binding price floor.Q6How does a tax on a good affect the price paid by buyers, and the quantity sold

21、A tax on a good raises the price buyers pay, lowers the price sellers receive, and reduces the quantity sold.Q7What determines how the burden of a tax is divided between buyers and sellers Why The burden of a tax is divided between buyers and sellers depending on the elasticity of demand and supply.

22、 Elasticity represents the willingness of buyers or sellers to leave the market, which in turns depends on their alternatives. When a good is taxed, the side of the market with fewer good alternatives cannot easily leave the market and thus bears more of the burden of the tax.7Q1Explain how buyers w

23、illingness to pay, consumer surplus, and the demand curve are related. Buyers willingness to pay, consumer surplus, and the demand curve are all closely related. The height of the demand curve represents the willingness to pay of the buyers. Consumer surplus is the area below the demand curve and ab

24、ove the price, which equals each buyers willingness to pay less the price of the good.Q2 Explain how sellers costs, producers surplus, and the supply curve are related.Sellers costs, producer surplus, and the supply curve are all closely related. The height of the supply curve represents the costs o

25、f the sellers. Producer surplus is the area below the price and above the supply curve, which equals the price minus each sellers costs.Figure 413Q2 Give an example of an opportunity cost that accountant might not count as a cost. Why would the accountant ignore the costAn accountant would not count

26、 the owners opportunity cost of alternative employment as an accounting cost. An example is given in the text in which Helen runs a cookie business, but she could instead work as a computer programmer. Because shes working in her cookie factory, she gives up the opportunity to earn $100 per hour as

27、a computer programmer. The accountant ignores this opportunity cost because no money flow occurs. But the cost is relevant to Helens decision to run the cookie factory.Q3What is marginal product, and what does it means if it is diminishingMarginal product is the increase in output that arises from a

28、n additional unit of input. Diminishing marginal product means that the marginal product of an input declines as the quantity of the input increases.Q8Defind economies of scale and explain why they might arise. Define diseconomies of scale and explain why then might arise.Economies of scale exist wh

29、en long-run average total cost falls as the quantity of output increases, which occurs because of specialization among workers. Diseconomies of scale exist when long-run average total cost rises as the quantity of output increases, which occurs because of coordination problems inherent in a large or

30、ganization.14Q2Draw the cost curves for a typical firm. For a given price, explain how the firm chooses the level of output that maximizes profit. Figure 2 shows the cost curves for a typical firm. For a given price (such as P*), the level of output that maximizes profit is the output where marginal

31、 cost equals price (Q*), as long as price is greater than average variable cost at that point (in the short run), or greater than average total cost (in the long run).Figure 2Q6 Does a firms price equal marginal cost in the short run, in the long run, or both Explain.The firms price equals the minim

32、um of average total cost only in the long run. In the short run, price may be greater than average total cost, in which case the firm is making profits, or price may be less than average total cost, in which case the firm is making losses. But the situation is different in the long run. If firms are making profits, other firms will enter the industry, which will lower the price of the good. If firms are making losses, they will exit the industry, which will raise the price of the good. Entry or exit continues until firms are making neither profits nor