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SherryYao
530299
APMICROREVIEW
BasicEconomicConcepts(8%14%)
Scarcity,choice,andopportunitycost
Scarcity:thelimitednatureofsociety’sresources
Economics:thestudyofhowsocietymanagesitsscarceresources
Peoplefacetradeoff(efficiencyorequality)
Opportunitycost:whatevermustbegivenuptoobtainsomeitem
Productionpossibilitiescurve
Theproductionpossibilitiescurveshowsthebinationsofoutputthattheeconomycanpossiblyproducegiventheavailablefactorsofproductionandtheavailableproductiontechnology
Qy
1、TheoppcostofQxequalstheslopeofcurve
2、TheoppcostofQxishigher,thecurveissteeper
3、oppcostisconstant,thePPFisstrictline
4、Technologyadvance→PPFshift
I
Inefficient
Qx
parativeadvantage,absoluteadvantage,specializationandtrade
parativeadvantage:theabilitytoproduceagoodataloweropportunitycostthananotherproducer
Absoluteadvantage:theabilitytoproduceagoodusingfewerinputsthananotherproducers
Tradecanbenefiteveryoneinsocietybecauseitallowspeopletospecializeinactivitiesinwhichtheyhaveaparativeadvantage、
Economicsystem
Propertyrightsandtheroleofincentives
Propertyrights:theabilityofanindividualtoownanexercisecontroloverscarceresources
Marketpower
Marketfailure:allocateresourcesinefficiently←
Negativeexternality
Incentive:somethingthatinducesapersontoact(theprospectofapunishmentorareward)
Marginalanalysis
Marginalchange:asmallincrementaladjustmenttoaplanofaction
Peoplemakechoicewhenmarginalbenefit＞marginalcost
2、TheNatureandFunctionsofProductMarkets(55%70%)
SupplyandDemand(15%20%)
Marketequilibrium
Asituationi
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