3. Microeconomics
Focuses on how decisions are made by individuals
and firms and the consequences of those decisions.
Example: How much it would cost for a university or
college to offer a new course ─ the cost of the instructor’s
salary, the classroom facilities, the class materials, and so
on.
Having determined the cost, the school can then decide
whether or not to offer the course by weighing the costs
and benefits.
4. Macroeconomics
Examines the aggregate 集体 behavior of the
economy (i.e. how the actions of all the
individuals and firms in the economy interact to
produce a particular level of economic
performance as a whole).
Example: Overall level of prices in the economy (how
high or how low they are relative to prices last year)
rather than the price of a particular good or service.
5. Difference between microeconomic and
macroeconomic questions.
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
Go to business school
or take a job?
How many people are employed
in the whole economy?
What determines the salary
薪水 offered by business?
What determines the overall
salary levels paid to workers in
a given year?
6. Difference between microeconomic and
macroeconomic questions.
What determines the cost to
a university of offering a
new course?
What determines the overall
level of prices in the whole
economy?
What government policies
should be used to make it
easier for poor students to
attend college?
What government policies
should be used to have full
employment and growth in the
whole economy?
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
7. Difference between microeconomic and
macroeconomic questions.
What determines
whether Citibank or
Bank of China opens a
new office in Shanghai?
What determines the overall
trade in goods, services
and financial assets
between countries and the
rest of the world?
MICROECONOMIC
QUESTIONS
MACROECONOMIC
QUESTIONS
8. 1.) Command Economy - Government plays the
central role in market
decision making
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by
Government
preferences.
Types of Economies
9. 2.) Free Market economy - Decisions about
how to allocate分配
resources are left up
to people themselves.
Types of Economies
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by
consumers preferences
Determined by
producers seeking profits
Determined by
purchasing power
10. 3.) Mixed economy - Incudes private and public
sectors, with only some
government control.
Types of Economies
i.) What to produce.
ii.) How much to produce.
iii.) How to produce it.
iv.) Who to produce it for.
Determined by
consumers and
government
preferences
12. Ways to interpret Economic theory
Positive economics
is the study of what is
结果是基于数据
Normative economics
is the study of what should be
是基于你的愿望是什么结果
14. Economic growth --经济增长
Full employment --充分就业
Economic efficiency --经济效率
Price level stability --价格水平的稳定
Economic freedom --自由经济体系
Equitable distribution --公平分配
Balance of trade --贸易差额
Macro Economic goals
To make our citizens as happy
as possible
To let everyone have a
“good” life
To let everyone achieve
their dreams
To live in a society that is
fair and healthy
To be free of disease and
suffering
To make tomorrow better than today
15. 1.) Full employment
About 5% unemployment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
About 2% inflation
About 3% growth (6-7% in China)
Keep trade deficits low, but no
percentage number as a guide
Macro Economic Goals
16. 1.) Full employment
Macro Economic Goals
- Full employment is achieved when all
available resources (labor, capital, land,
and entrepreneurship) are used to
produce goods and services.
- About 5% unemployment
17. 1.) Full employment
2.) Stability (Prices)
- About 2% inflation
Macro Economic Goals
- Stability is achieved by avoiding or
limiting fluctuations in production,
employment, and prices.
- Stability seeks to avoid the
recessionary declines and inflationary
expansions of business cycles..
18. 1.) Full employment
2.) Stability (Prices)
3.) Economic growth
- About 3% growth (6-7% in China)
Macro Economic Goals
- Economic growth is achieved by
increasing the economy's ability to
produce goods and services.
- This goal is best indicated by
measuring the growth rate of
production.
19. 0
1,000
2,000
3,000
4,000
5,000
6,000
0 100 200 300 400 500 600
AxisTitle
Axis Title
Consumption
goods
Capital
goods
Economic Growth
- Sustained expansion of
the production
possibilities frontier
- to have economic
growth means to
increase the PPF so
more can be produced
without having to
trade-off for as much.
Production Possibilities Curve
This same idea
20. Time
Short Run
Econ
Growth
Long Run
- Looking at trend 趋向
over long periods of time.
- Averaging out the short
run.
Business Cycle Model
Trying to stay at or
above the long term
trend.
21. 1.) Full employment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
Keep trade deficits low, but no
percentage number as a guide.
Macro Economic Goals
22. 1.) Full employment
About 5% unemployment
2.) Stability (Prices)
3.) Economic growth
4.) Balance of Payments Equilibrium
About 2% inflation
About 3% growth (6-7% in China)
Keep trade deficits low, but no
percentage number as a guide
Macro Economic Goals
