Chương 110 nguyên lý kinh tế học

Chương 1 của kinh tế vi mô bản tiếng Anh nêu về 10 nguyên tắc kinh tế học, phân loại và đặc điểm của kinh tế vi mô và vĩ mô và khái quát về những vấn đề liên quan đến kinh tế vi mô và vĩ mô, cho thấy sự phụ thuộc lẫn nhau và lợi ích từ thương mại. Được trích từ giáo trình của Mankiw.

Nguyen Thuy Phuong (PhD)

Chap 1: Microeconomics and enterprises of basic economic problems

LECTURER’S INFORMATION

(FTU, FPTGW, HCMUTE)

Management, Negotiation, Work in groups

• International Journals & Conferences: 06

• Vietnamese Journals & Conferences: 14

Dr Thuy-Phuong Nguyen nguyenthuyphuong@hcmute.edu.vn

• Text book: Principles of

Economics, N Gregory Mankiw,

Group presentation

• Time limitation:

• 20 minutes for presentation

• extra x minutes = -0.x points

• Scorecard:

• Presentation (85%) + class involvement (10%) + 5% group co-ordination

• Be divided by contributions provided that the

Total scores = average scores * #members

Topics for presentation

1 Benefits of the opportunity cost approach to individual

decision making.

2 Do luxury goods follow the law of demand?

3 How does advertising affect price elasticity?

4 Examples of income and substitution effects on consumers’

purchasing behavior.

5 How do firms use the long-run average cost curve in their

planning?

6 Losses from monopoly: theory and practice

7 Impact of marital status on the labor force composition

Course content

• Chap 1: Microeconomics and enterprises of

basic economic problems

• Chap 2: Demand and supply

• Chap 3: Elasticity

• Chap 4: Theory about actions of customers

• Chap 5: Theory about action of producers

Chap 6: Competition and exclusive

• Chap 7: Labor market

• Chap 8: The malfunction of market and the

Chap 1: Microeconomics and enterprises of

basic economic problems

WHY SHOULD YOU STUDY?

How it would help your study and career?

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Microeconomics .

The word economy comes from a Greek

word for “one who manages a household.”

Economy .

THE BASIC ECONOMIC PROBLEMS

• Society and Scarce Resources:

• The management of society’s resources is

important because resources are scarce.

• Scarcity means that society has limited

resources and therefore cannot produce all the

goods and services people wish to have.

THE BASIC ECONOMIC PROBLEMS

Economics is the study

of how society manages

its scarce resources.

- People: how much to

work, save, and spend?

- Firms: how much to

produce, how many

workers to hire?

- Society: how to divide

its resources between

activities?

TEN PRINCIPLES OF ECONOMICS

• How people make decisions (4 principles)

• How people interact (3 principles)

• How the economy as a whole works (3

principles)

HOW PEOPLE MAKE DECISIONS

• People face trade-offs.

• The cost of something

is what you give up to

• “There is no such thing as a free lunch!”

Principle #1: People Face Trade-offs.

Making decisions requires trading

off one goal against another

Principle #1: People Face Trade-offs.

• To get one thing, we usually have to give up

Principle #2: The Cost of Something Is

What You Give Up to Get It.

• Decisions require comparing costs and benefits

of alternatives

• Whether to go to college or to work?

• Whether to study or go out on a date?

• Whether to go to class or sleep in?

• The opportunity cost of an item is what you

give up to obtain that item

Principle #2: The Cost of Something Is

What You Give Up to Get It.

• Basketball star LeBron James understands opportunity costs and

• A person is rational if she systematically and

purposefully does the best she can to achieve

her objectives

• Many decisions are not “all or nothing,” but

involve marginal changes - small, incremental adjustments to an existing plan of action

People make decisions by comparing

costs and benefits at the margin

Principle #3: Rational People Think at the Margin.

• Examples:

• A student considers whether to go to college for an additional year, comparing the fees & foregone

wages to the extra income he could earn with an

extra year of education

• A firm considers whether to increase output,

comparing the cost of the needed labor and

materials to the extra revenue.

Principle #3: Rational People Think at the Margin.

Principle #4: People Respond to

Incentives.

• Marginal changes in costs or benefits motivate people to respond

• The decision to choose one alternative over

another occurs when that alternative’s marginal benefits exceed its marginal costs!

A C T I V E L E A R N I N G 1:

Exercise

• You are selling your old car At the last minute, the transmission dies You can pay $600 to

have it repaired, or sell the car “as is.” In each

of the following scenarios, should you have the transmission repaired?

• A Blue book value is $6500 if transmission works,

$5700 if it doesn’t

• B Blue book value is $6000 if transmission works,

$5500 if it doesn’t

HOW PEOPLE INTERACT

• Trade can make

everyone better off.

• Markets are usually a

good way to organize

economic activity.

• Governments can

sometimes improve

economic outcomes.

Principle #5: Trade Can Make Everyone

Better Off.

• Rather than being self-sufficient, people can

specialize in producing one good or service and

exchange it for other goods.

• Countries also benefit from trade & specialization:

• get a better price abroad for goods they produce

• buy other goods more cheaply from abroad than could

be produced at home

Principle #6: Markets Are Usually a Good Way to Organize Economic Activity.

• A market is a group of buyers and sellers

• A market economy is an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

• Households decide what to buy and who to work

for.

• Firms decide who to hire and what to produce

Principle #6: Markets Are Usually a Good Way to Organize Economic Activity.

• Famous insight by Adam Smith in The Wealth

of Nations (1776):

“Each of these households and firms acts as if “led by

an invisible hand” to promote general economic being.”

well-=> prices guide decision makers to reach outcomes

that tend to maximize the welfare of society as a

whole.

Principle #7: Governments Can

Sometimes Improve Market Outcomes.

• Markets work only if property rights are

enforced

• Property rights are the ability of an individual to

own and exercise control over a scarce resource

• Market failure occurs when the market fails to allocate resources efficiently

• When the market fails (breaks down)

government can intervene to promote efficiency

Principle #7: Governments Can

Sometimes Improve Market Outcomes.

• Market failure may be caused by:

• an externality (ngoại tác), which is the impact of

one person or firm’s actions on the well-being of a bystander.

• market power, which is the ability of a single

person or firm to unduly influence market prices

(ex Monopoly)

=> Govt: use tax, welfare, law…to improve market

outcomes

HOW THE ECONOMY AS A

• Society faces a short-run trade-off between

inflation and unemployment

Principle #8: A Country’s Standard of Living

Depends on Its Ability to Produce Goods and

Services.

• Standard of living may be measured in different ways:

• By comparing personal incomes.

• By comparing the total market value of a nation’s production.

• Almost all variations in living standards are

explained by differences in countries’

productivities

Principle #9: Prices Rise When the

Government Prints Too Much Money.

• Inflation is an increase in the overall level of

prices in the economy

• One cause of inflation is the growth in the

quantity of money

• When the government creates large quantities

of money, the value of the money falls

Principle #10: Society Faces a Short-run off between Inflation and Unemployment.

Trade-• The Phillips Curve illustrates the trade-off

between inflation and unemployment:

• Inflation or Unemployment

• It’s a short-run trade-off!

• The trade-off plays a key role in the analysis of the

business cycle—fluctuations in economic activity, such as employment and production

Inflation and Unemployment in Election Years

year U rate inflation rate elec outcome

What will happen if taxes are raised?

What will the unemployment rate be?

How much income will a country save?

How much will a consumer

spend on food?

Macroeconomics issues Microeconomics issues

Microeconomics and Macroeconomics

• Microeconomics focuses on the individual

parts of the economy

• How households and firms make decisions and how they interact in specific markets

• Macroeconomics looks at the economy as a whole

• Economy-wide phenomena, including inflation, unemployment, and economic growth

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play games

The Scientific Method: Observation, Theory,

and More Observation

• Uses abstract models to help explain how a

complex, real world operates

• Develops theories, collects and analyzes data

to evaluate the theories

• Economists make assumptions in order to

make the world easier to understand

• The art in scientific thinking is deciding

which assumptions to make

• Economists use different assumptions to

answer different questions

The Role of Assumptions

Economic Models

• Economists use models to simplify reality in

order to improve our understanding of the

world

• Examples of model:

Our First Model: The Circular-Flow

Figure 1 The Circular Flow

Spending

Goods and services bought

Revenue

Goods and services sold

Labor, land, and capital Income

Factors of production

Wages, rent, and profit

•Households sell

•Firms buy

MARKETS FOR FACTORS OF PRODUCTION

•Firms sell

•Households buy

MARKETS FOR GOODS AND SERVICES

Our Second Model: The Production

Possibilities Frontier

• The production possibilities frontier is a graph that shows the combinations of output that the economy can possibly produce given the

available factors of production and the available production technology

Production Possibilities Frontier Example

• Two goods: computers and wheat

• One resource: labor (measured in hours)

• 50,000 labor hours per month available for

Production Possibilities Frontier Example

Employment of labor hours

A C T I V E L E A R N I N G 2:

Exercise

a Fill in the table the appropriate data

b Draw the PPF

c On the graph, find the point F that represents

(100 computers, 3000 tons of wheat) Would it be possible to produce? Would it be efficient to

produce?

d Find the point G that represents 300 computers,

3500 tons of wheat Would it be possible to

Our Second Model: The Production Possibilities Frontier

• Concepts illustrated by the production possibilities frontier

• Efficiency

• Trade-offs

• Opportunity cost

• Economic growth

Figure 2 The Production Possibilities

Frontier

Production possibilities frontier

A C T I V E L E A R N I N G 3:

PPF and Opportunity Cost

Figure 3 A Shift in the Production

THE ECONOMIST AS POLICY

ADVISOR

• When economists are trying to explain the

world, they are scientists

• When economists are trying to change the

world, they are policy advisors

Positive versus Normative Analysis

• Positive statements are statements that attempt

to describe the world as it is

• Called descriptive analysis

• E.g High price makes demand reduce

• Normative statements are statements about how the world should be

• Called prescriptive analysis

• E.g We should reduce the price

Positive Versus Normative Analysis

• Are the following positive or normative

statements?

• An increase in the minimum wage will cause a

decrease in employment among the least-skilled.

Positive Versus Normative Analysis

• Are the following positive or normative

A C T I V E L E A R N I N G 4:

Excercise

• Find examples illustrating the positive and

normative statements in microeconomics (1

group) and macroeconomics fields (1 group)

Economists in Washington

• serve as advisers in the policymaking

process of the three branches of government:

• Legislative

• Executive

• Judicial

Economists in Washington & VN

Some government agencies that collect economic data and make economic policy include: