ECON 101 Saudi Electronic University Competitive Market Structures Analysis
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To assess your ability to:
1.
2.
3.
4.
Analyze the relationships between revenues, costs, and profits in a variety of market settings.
Discuss government regulations of less than competitive market structures and firms.
Discuss economists’ approach to evaluating potential mergers and acquisitions.
Evaluate the extent of a company’s market power.
Action Items
1.
1.
1.
2.
?
?
3.
2.
3.
Write a one to two page paper, addressing the following:
Describe in your own words the concept of market power.
Provide an example of a firm exercising its market power.Referring to your example above,
answer the following questions:
What are the sources of the firm’s market power?
Can they be sustained over a short run / long run?
Answer the question below in your conclusion:
? Why is it hard for a firm to maintain market power over a Long Run?
Post the above introduction to the Class Discussion Board.
Respond to the postings of two of your classmates.
Submission Instructions
Complete and submit this assignment per your professor’s instructions.
Survey of Economics: Principles,
Applications and Tools
Eighth Edition
https://www.pearson.com/mylab
Course ID: chakroun54908
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Survey of Economics: Principles,
Applications and Tools
Eighth Edition
Chapter 1
Introduction: What Is
Economics
? ?? ?? ??????????:???????
?
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Chapter Outline
1.1 What Is Economics?
1.2 The three economic questions: What, How and Who?
1.3 The Economic Way of Thinking
1.4 Microeconomics Verus Macroeconomics
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1.1 What Is Economics? ?? ?? ??????????1.1
?
Economics: The study of choices when there is scarcity.
.? ????? ???????? ????? ???? ???? ?????:??????????
Scarcity: The resources we use to produce goods and
services are limited.
.? ??????? ???? ???????? ?????? ????? ???????? ???????:????????
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Some Examples of Scarcity and Trade-offs???? ??????? ??? ?????? ???????????
You have a limited amount of time. Each hour on the job means one less hour
for study or play ? ?? ???? ?? ????? ???? ???? ??? ??????? ?? ??????.????? ???? ????? ???????.
A city has a limited amount of land. If the city uses an acre of land for a park, it
has one less acre for housing, retailers, or industry
. ? ??? ????? ????? ? ??? ???? ??????? ?????? ?????? ?? ??????? ???????.???????? ????? ????? ?????? ?? ????????
.????? ???? ??? ??????? ?? ???? ??????? ?? ????????
You have limited income this year. If you spend $17 on a music CD, thats $17
less you have to spend on other products or to save.
? ?????? ??? ???????? ????17 ? ??? ??? ?????.????? ??? ????? ??? ??????D ? ?????? ??? ?????17 ? ???? ????
.?????? ??? ????? ?? ???????? ?? ???????
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The Five Factors of Production (1 of 2) )2 ? ???1( ???????? ?????? ????????
Factors of Production: The resources used to produce goods and services;
also known as production inputs or resources.
.? ??????? ????????? ?????? ????? ????????? ??????? ???? ???? ?????? ??????? ?? ????????:?????? ????????
Natural Resources: Resources provided by nature and used to produce goods
and services.
? ??????? ???? ?????? ??????? ??????? ?? ????? ????? ?????????:???????? ?????????
Labor: Human effort, including both physical and mental, used to produce goods
and services.
? ?????? ?????? ????? ??????????? ??? ?? ??? ?????? ??????? ??? ?? ??????? ????? ???????:???????
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The Five Factors of Production (2 of 2) )2 ? ???2( ???????? ?????? ????????
Physical Capital: The stock of equipment, machines, structures, and
infrastructure that is used to produce goods and services.
? ????? ??????? ??????? ???????? ??????? ??????? ????????? ?? ????? ????? ?????????:???? ????? ???????
Human Capital: The knowledge and skills acquired by a worker through
education and experience and used to produce goods and services.
? ??????? ?????? ???????? ??????? ????????? ???? ??????? ?????? ?? ???? ??????? ????????:???? ????? ???????
.??????????
Entrepreneurship: The effort used to coordinate the factors of production
natural resources, labor, physical capital, and human capitalto produce and sell
products.
? ???? ???????? ???? ????? ????????? ????????? ??????? ?????????- ? ????? ??????? ?????? ????? ????????:?????? ????????
? ?????? ???????? ???????- ????????
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1.2 The Three Key Economic Questions: What, How, and
Who?? ???? ???? ?????:? ??????? ?????????? ???????? ????????1.2
The choices made by individuals, firms, and governments
answer three questions:
1. What products do we produce?
2. How do we produce the products?
3. Who consumes the products?
?????????? ???? ?????? ??????? ???????? ????????? ???? ????
?????? ??????:
??? ?? ???????? ???? ????????
???? ???? ??????????
??? ?????? ??????????
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Economic Models?????? ?????????
Economists use economic models to explore the choices
people make and the consequences of those choices.
???????? ????? ???????? ????? ???????? ???????? ???????? ???? ?????? ??????
.????????? ???????? ??? ??? ?????????
Economic model: A simplified representation of an
economic environment, often employing a graph.
.? ? ?????? ? ?? ?????? ???? ? ????????? ????? ???? ?????? ???????????:???????? ??????????
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Positive versus Normative Analysis???????? ???????? ????? ??????? ?????????
Most modern economics is based on positive analysis:
:??????? ???? ???????? ?????? ??? ??????? ?????????
Positive Analysis: Answers the question What is? or What will be?
“? ???? ??? ?????? “?? ???” ?? “???? ???????:?????? ???????
A second type of economic reasoning is normative in nature:
Normative Analysis: Answers the question What ought to be?
“? ???? ??? ?????? “???? ??? ?? ??????:???????? ?????????
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Table 1.1 Comparing Positive and Normative Questions
????????1-1 ??????? ??????? ????????? ???????????
Positive Questions
Normative Questions
If the government increases the
minimum wage, how many workers
will lose their jobs?
Should the government
increase the minimum wage?
If two office-supply firms merge, will
the price of office supplies increase?
Should the government block
the merger of two office-supply
firms?
How does a college education affect Should the government
a persons productivity and earnings?
subsidize a college education?
How do consumers respond to a cut
in income taxes?
Should the government cut
taxes to stimulate the
economy?
If a nation restricts shoe imports, who Should the government restrict
imports?
benefits and who bears the cost?
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Positive Questions
If the government increases the
minimum wage, how many workers
will lose their jobs?
If two office-supply firms merge, will
the price of office supplies increase?
How does a college education affect
a persons productivity and earnings?
How do consumers respond to a cut
in income taxes?
If a nation restricts shoe imports, who
benefits and who bears the cost?
?????? ????????
? ???????? ???? ??????? ???? ?????? ???????
???? ?????? ????? ??????? ?????????
? ???????? ???? ?????? ???????? ????????
??????? ??? ??????? ??????????
???? ???? ??????? ??????? ??? ????????
?????? ?????????
???? ?????? ?????????? ?????
???????? ??? ???????
? ???????? ???? ???? ?? ???? ?????? ????????
????????? ??? ????? ?????????
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Normative Questions
Should the government
increase the minimum wage?
Should the government block
the merger of two office-supply
firms?
Should the government
subsidize a college education?
Should the government cut
taxes to stimulate the
economy?
???????? ??????????
??? ??? ??? ??????? ????? ???? ?????? ????????
??? ????? ??????? ?? ???? ?????? ?????? ???????
??????????
??? ????? ??????? ?? ???? ??????? ?????????
??? ????? ??????? ?? ???? ??????? ?????? ??????????
??? ??? ??? ??????? ?? ???? ??????????
Should the government restrict
imports?
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1.3 The Economic Way of Thinking? ??????? ????????? ?? ????1.3
List the four elements of the economic way of thinking.
.?????? ??????? ??????? ?????? ??????? ???????????
The theory of economics does not furnish a body of settled
conclusions immediately applicable to policy. It is a method
rather than a doctrine, an apparatus of the mind, a technique
of thinking which helps its possessor draw correct
conclusions. ?????? ???????? ?? ???? ?????? ?? ??????????? ???????? ?????
? ????? ???????? ???? ???????? ???? ????? ????? ??????.?????? ??? ????? ??? ????????
.”?????? ?????? ??? ??????? ??????????? ????????
John Maynard Keynes, The Collected Writings of John Maynard
Keynes, Volume 77 ? ????????? ???????? ???? ?? ????? ???? ??????? ?????????? ??????? ?????
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Use Assumptions to Simplify???????? ?????????? ???????
Economists use assumptions to make things simpler and
focus attention on what really matters.
We have to be careful to make the right assumptions and
simplifications.
???????? ????? ???????? ?????????? ???? ?????? ???? ??????
??????? ???????? ??? ?? ??? ????.
??????? ?? ???? ????? ???? ?????????? ?????????? ????????.
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Isolate VariablesCeteris Paribus
???? ??????????- ???????? ????????
Economists often consider how one variable changes in isolation, in
order to see how its changes affect other variables
? ?? ??? ????? ????? ????????????? ? ?? ???? ????? ???????? ?? ????? ????? ????? ???? ?? ???????
????????? ??? ????????? ???????.
Variable: A measure of something that can take on different values.
.? ????? ???? ???? ?? ???? ??? ??? ???????:?????????
Ceteris Paribus: The Latin expression meaning that other variables
are held fixed
Ceteris Paribus: .???????? ???????? ???? ?? ??? ????? ????????? ???????
.
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Think at the Margin???? ?? ???????
How will a small change in one variable affect another
variable, and what impact will that have on peoples
decision-making?
? ??? ?? ????? ??? ????????? ????? ??????? ?????? ?? ????? ?? ??? ????? ????
?????? ??? ?????? ??? ???????
Marginal Change: A small, one-unit change in value
? ????? ???? ?? ???? ????? ?? ???????:?????? ??????
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Rational People Respond to Incentives???????? ???????? ????????
A key assumption of most economic analysis is that people act rationally,
that is, in their own self-interest.
? ?? ?? ??? ??????? ?????????????????? ??????? ????? ????????? ?????????? ?? ?? ????? ??????? ?????????
This does not mean that people are only motivated by self-interest, but instead
that this is their primary motivation.
? ??? ??? ?? ?????? ????????? ? ???? ????? ?? ????? ???? ?? ???? ?? ????? ??????? ??? ???????? ????????
Rationality implies that when the payoff (benefit) to doing something changes,
people will change their behavior to make their payoff as large as possible
? ????? ????? ?????? ???? ????????? ?????????? ???? ??? ????? ????? ??????? (???????) ???? ??? ???
????? ??? ?????.
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1.4 Microeconomics Vs Macroeconomics ? ???????? ?????? ??????1.4
????????? ??????
The field of economics is divided into two categories: macroeconomics and
microeconomics.
? ???????? ????? ????????? ???????:?????? ???? ???????? ??? ??????
Macroeconomics: The study of the nations economy as a whole; focuses on the
issues of inflation, unemployment, and economic growth.
.? ????? ?????? ????? ???? ???? ??? ????? ?????? ???????? ?????? ??????????:????????? ??????
Microeconomics: The study of the choices made by households, firms,
and governments, and how these choices affect the markets for goods and
services
? ???? ???? ??? ???????? ??? ???????? ????? ???????? ???? ??????? ????? ???????? ??????????:????????? ???????
?????? ?????????
.
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Using Macroeconomics to Understand Why Economies Grow
???????? ???????? ????? ???? ??? ??? ???????????
The world economy has been growing in recent decades, averaging
about 1.5 percent higher per capita income per year.
. ? ?? ???????1.5 ???? ??? ???????? ??????? ???? ?? ?????? ??????? ??? ??? ????? ??? ????? ?? ??????
Why do some countries grow much faster than others?
Macroeconomics will help us understand why.
.?????? ???? ??? ??????? ?????? ???? ?? ?????? ????????? ???????? ????? ??? ??? ??????
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Using Macroeconomics to Understand Economic
Fluctuations???????? ???????? ????? ???? ???????? ???????????
All countries, even those where per capita income is
generally rising, experience economic fluctuations,
including periods where the economy temporarily shrinks.
? ??? ?? ?????? ????? ?? ?????? ??????????? ??? ??? ???? ????? ???? ??? ????? ???????????? ????????
???????? ???? ????? ???? ???????? ??????
What options do governments have to moderate these
fluctuations?
??? ?? ???????? ??????? ???? ???????? ?????? ??? ??? ??????????
And should they do so?
???? ????? ??? ?? ?????? ?????
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Using Macroeconomics to Make Informed Business
Decisions???????? ???????? ????? ?????? ?????? ?????? ????????
A manager who studies macroeconomics will be better
equipped to understand the complexities of interest rates
and inflation, and how they affect the firm.
???????? ?????? ???? ???? ???????? ????? ????? ? ???? ???? ???? ??????? ????? ??????? ????????
.????? ???? ??? ???????
Should a firm borrow money now at a fixed interest rate? Or wait a
while, hoping interest rates will fall?
? ??? ??? ?? ?????????? ????? ?? ????? ?????? ????? ???? ???? ????? ????? ?? ???????? ??????
?????? ?????????
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Using Microeconomics to Understand Markets and
Predict Changes???????? ???????? ?????? ???? ??????? ??????? ??????????
One reason for studying microeconomics is to better understand how
markets work and to predict how various events affect the prices and
quantities of products in markets.
???? ????? ????? ???????? ?????? ??? ???? ?????? ??? ??????? ??????? ?????? ????? ????? ????????
.???? ????? ?????? ???????? ?? ????????
For example, how would a tax on beer affect::? ??? ????? ????? ?????? ????????? ???? ???????
1. The price of beer????? ????????
2. How many people buy beer???? ??? ????? ????? ?????? ????????
3. How many people are likely to drink and drive?
4. ????????? ???????? ????? ?????? ?????? ?????? ????????
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Using Microeconomics to Make Personal and Managerial
Decisions???????? ???????? ?????? ?????? ???????? ??????? ??????????
On the personal level, we use economic analysis to decide how to spend our time,
what career to pursue, and how to spend and save the money we earn
?? ??? ?? ?????? ???? ??? ?????????? ?????? ??????? ????????? ?????? ????? ???? ??????????? ??????? ???????
.??????? ????? ?????? ????? ???? ??????
.
Managers use economic analysis to decide how to produce goods and
services, how much to produce, and how much to charge for them.
? ??? ??? ?? ?????? ??? ?? ???????????????? ???????? ??????? ????????? ?????? ????? ????? ????? ?????????
.???? ???? ??????
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Using Microeconomics to Evaluate Public Policies
???????? ???????? ?????? ?????? ???????? ???????
We can use economic analysis to determine how well the government
performs its roles in the market economy.
.??????? ??????? ??????? ????????? ?????? ??? ???? ??????? ?????? ?? ?????? ??????
For example, prescription drugs are protected from being copied because
of government patents.
.? ??? ????? ??????? ???????? ????? ?? ????? ???? ?????? ???????? ?????????????? ???? ???????
If we shortened patent lengths, we may get cheaper generic drugs sooner; but
fewer drugs may get developed because of the decreased profitability of drug
development.
? ??? ???? ??? ????? ??? ?????? ???? ?? ??? ????? ???? ?? ?????????? ???? ?????? ????? ?????????
.???? ??? ??? ?? ???????? ???????? ???? ?????? ????? ????? ?????????
Microeconomics can help evaluate the best policy here.
.?????? ???????? ?????? ?? ????? ?? ????? ???? ????? ????
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Key Terms????? ????????
Ceteris paribus
Marginal change
???????? ????????
???????? ??????????
Economics
??????????
?????? ?????????
Entrepreneurship
?????? ????????
???? ????? ???????
Factors of production
???????
????????? ??????
Human capital
Microeconomics
Labor
Scarcity
Macroeconomics
Variable
Economic model
Natural resources
Normative analysis
Physical capital
Positive analysis
??????? ????????
????????? ???????
???????? ?????????
???????? ?????????
???? ????? ???????
???????? ?????????
??????
???????
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1A.1 Using Graphs 1A.1 ???????? ?????? ?????????
Economists use several types of graphs to present data,
represent relationships between variables, and explain
concepts.
?? ?????? ???????? ??? ?????????????????? ??????????? ??? ????? ?? ?????? ???????? ???? ?????????
.????? ?????????
Although it is possible to do economics without graphs, its
a lot easier with them in your toolbox.
? ??? ?????? ????? ???? ???? ???? ????? ?? ??? ?? ?????? ?????? ????????? ??? ?????? ?????????
?????? ??????? ????? ???
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Figure 1A.1 Graphs of Single Variables1 ? ??????A.1
?????????? ????????
??????? ?????????
Left: Pie Graph for Types of Recorded Music Sold in the United States
Right: Bar Graph for U.S. Export Sales of Copyrighted Products
???? ???????: ???? ????? ????? ?????? ???????? ??????? ???? ?? ????? ?? ???????? ????????
????????: ????? ????? ??????? ??????? ?????? ???????? ??????? ?? ???????? ??????? ????? ????? ???????
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Figure 1A.2 Time Series Graph1 ? ????? ????????A.2 ?????? ??????
A time series graph shows how the value of a variable changes
over time. In the right panel, the vertical axis is truncated,
indicated by the double hash marks on the y-axis. This
exaggerates the fluctuations in the data.
????? ????? ??????? ?????? ????? ????? ???? ???? ??????? ????? ??????. ? ???????? ?????? ???????
? ?????? ???? ?????? ?????? ??????? ???????? ??? ??????????????? ?????? ????????y. ????? ??????
??? ???????? ?? ?????????.
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Figure 1A.3 Basic Elements of a Two-Variable Graph1 ? ??????A.3 ?????????
???????-2 ????????? ????? ????????
One variable is measured along the
horizontal, or x, axis, while the other variable
is measured along the vertical, or y, axis.
? ???????? ???? ????? ???? ??? ?????? ???????x ? ????? ??? ??????
? ?? ???????????????? ????? ??? ?????? ????????y?
The origin is defined as the intersection of
the two axes, where the values of both
variables are zero.
? ??? ???? ??? ????????? ????? ????? ?????? ?????????
.? ?????????? ?????
The dashed lines show the values of the two
variables at a particular point.
????? ?????? ???????? ??? ????????? ??? ???? ??????
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Graphing Two Variables???????????
The slope of a line relating two variables on a graph indicates whether they
have a positive or negative relationship.
.????? ??? ?? ???? ????? ??????? ?? ????? ??????? ??? ?? ??? ???? ????? ????? ????? ?? ??????
Positive relationship: A relationship in which two variables move in the
same direction.
? ????? ????? ???? ??????? ?? ??? ????????:???????? ??????????
Negative relationship: A relationship in which two variables move in
opposite directions.
? ????? ????? ???? ??????? ?? ??????? ?????????:?????? ??????
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Figure 1A.4 Relationship between Hours Worked and Income
???????1 ?????-4 ???????? ??? ????? ????? ???????
There is a positive relationship
between work hours and income, so
the income curve is positively sloped
?????? ????? ??????? ??? ????? ????? ???????
.????????? ??? ????? ????? ????? ???? ???????
? ?? ???? ??? ???????:? ????????8 ???? ??????? ???
.? ????????8 ????? ????? ???????.
The slope of the curve is $8: Each
additional hour of work increases
income by $8.
? ?? ???? ??? ???????:? ????????8 ???? ??????? ???
.? ????????8 ????? ????? ???????
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Computing the Slope????? ????????
?Income
?Work hours
Vertical difference between two points rise
Slope =
=
Horizontal difference between two points run
Slope =
Slope of a curve: The vertical difference between two points (the rise)
divided by the horizontal difference (the run).
.)? ????? ?????? ??? ?????? (????????) ?????? ? ??? ????? ?????? (??????:???? ????????
In general, if the variable on the vertical axis is y and the variable on the
horizontal axis is x, we can express the slope as:
? ??? ??? ??????? ??? ?????? ??????? ????????? ????y ????????? ??? ?????? ?????? ???x ? ????????
???????? ?? ????? ??? ??????
Slope =
?y
?x
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Figure 1A.5 Movement Along a Curve versus Shifting the Curve
1 ???????A.5 ????? ??? ??? ????? ????? ????? ????????
To draw a curve showing the relationship between
hours worked and income, we fix the weekly
allowance ($40) and the wage ($8 per hour) ????? ??????
40( ? ???? ?????? ????? ??????????????? ??????? ??? ????? ????? ???????
.)? ??????? ?? ???????8( ???????) ???????
.
?
A change in the hours worked causes movement
along the curve, for example, from point b to point c.
?? ??? ???? ?????????????? ?? ????? ????? ???? ???? ??? ??? ????????
??? ?????? ? ??? ?????? ??
A change in any other variable shifts the entire curve.
For example, a $50 increase in the allowance (to $90)
shifts the entire curve upward by $50.
? ??? ???????? ???? ???? ???????.?????? ?? ?? ????? ??? ????? ????? ???????
? ??????) ???? ??????? ?????? ??? ???????90 ? ?????? (????50 ?????? ???????
? ???????50 ????????
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Figure 1A.6 Negative Relationship between CD Purchases and
Downloaded Songs1 ? ??????A.6 ?????? ????? ????C D ?????????? ???????? ???? ?? ????????
There is a negative relationship between the
number of CDs and downloaded songs that a
consumer can afford with a budget of $360.
????? ????? ????? ??? ??? ???C Ds ????????? ???? ?? ??????? ???? ?????
.? ???????360 ????????? ???? ?? ??????? ??????
The slope of the curve is ?$12: Each additional CD (at
a price of $12 each) decreases the number of
downloadable songs (at $1 each) by 12 songs.
12 ? ?? ???? ????? ?????? (?????:??????? ?????????
12- ???? ??????? ???
?
)??????? ??? ????) ???? ?? ??? ??????? ??????? ??????? (???? ????? ??? ??????
?
? ??????12 ????????
Slope =
Vertical difference
Horizontal difference
=
120 ? 240 ? 120
=
= ? 12
20 ? 10
10
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Figure 1A.7 Nonlinear Relationships (1 of 21 ? ??????A.7 )2 ? ???1( ????????? ??? ???????
)
There is a positive and nonlinear relationship
between study time and the grade on an exam.
As study time increases, the exam grade
increases at a decreasing rate
. ????? ????? ??????? ???? ???? ??? ??? ??????? ??????? ???
? ????? ???? ???????? ???????? ?? ????? ??? ????????.??????????
????????
For example, the second hour of study
increased the grade by 4 points (from 6 points
to 10 points), but the ninth hour of study
increases the grade by only 1 point (from 24
points to 25 points).
4 ? ???? ?????? ??????? ?? ??????? ???? ???????????? ???? ???????
? ???? ?????? ??????? ?? ?????????)? ?????10 ? ???? ????6 ????? (???
.)? ?????25 ? ???? ????24 ????? ???? ?????? ???? ????? ??? (???
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Figure 1A.7 Nonlinear Relationships (2 of 21 ? ??????A.7 )2 ? ???2( ????????? ??? ???????
)
There is a positive and nonlinear relationship
between the quantity of grain produced and
total production cost. As the quantity increases,
the total cost increases at an increasing rate.
????? ????? ??????? ???? ???? ??? ???? ?????? ??????? ???????
? ????? ????? ???????? ???????? ??? ????? ???????.???????? ??????????
.????????
For example, to increase production from 1 ton
to 2 tons, production cost increases by $5 (from
$10 to $15) but to increase the production from
10 to 11 tons, total cost increases by $25 (from
$100 to $125).
? ???? ???????? ?????? ??????? ?? ?? ??? ??????????? ???? ???????
? ??????) ?????15 ? ??????? ????10 ? ??????? (???5 ???????? ???????
? ???? ??????? ???????????? ????11 ? ????? ????10 ??????? ??????? ???
.)? ???????125 ? ????? ????100 ? ?????? (???25 ????????
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1A.2 Computing Percentage Changes and Using
Equations
1A.2 ???????? ?????? ??????? ??????? ???????? ??????????
To compute a percentage change, we divide the change in
the variable by the initial value of the variable, and then
multiply by 100:
? ?? ???? ????? ???? ??????? ?? ??????? ??? ?????? ??????? ??????????????? ???? ??????
:100
Percentage change =
New value ? initial value
? 100
Initial value
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Application 3: The Perils of Percentages (1 of 2)
?????????3: ?(????? ????? ????????1 ????2)
In the 1970s, the government of Mexico City repainted the highway lane lines on
the Viaducto to transform a four-lane highway into a six-lane highway
? ????? ????? ?????? ???? ???? ???? ??? ????? ??????? ???????? ???????????Viaducto ??????? ?????
.????? ?? ????? ????? ??? ???? ???? ?? ??? ??????.
The government announced that the highway capacity had increased by 50%
(equal to 2 divided by 4)
.)4 ? ?????? ????2 ? (?? ?? ??????%50 ??????? ??????? ?? ??? ????? ??????? ?? ???? ??????.
Unfortunately, the number of collisions and traffic fatalities increased, and one
year later the government restored the four-lane highway and announced that
the capacity had decreased by 33% (equal to 2 divided by 6).
? ???????? ???? ???? ??? ??????? ??? ??? ????? ??????? ???????? ??????? ?? ???? ?????????????? ?????
? (???%33 ???????? ?????? ?????? ?????? ?? ????? ????? ?????? ?? ?????? ??????????? ?? ?????? ??????
.)6 ? ??????? ????2 ??? ??????
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Application 3: The Perils of Percentages (2 of 2)
?????????3: ?(????? ????? ????????2 ????2)
This anecdote reveals a potential problem with using the simple approach to
compute percentage changes. Because the initial value (the denominator)
changes, the computation of percentage increases and decreases are not
symmetric.
? ??? ???????.????? ??? ??????? ?? ????? ?????? ?? ??????? ????? ?????? ????? ???????? ?? ?????? ????????
.? ???? ????? ????? ???????? ??? ???????????????? (??????) ??????
There is a solution to this problem: using the midpoint method for percentage
changes:
? ??????? ????? ???? ????? ????????? ?????? ????????:????? ?? ???? ????????
Percentage change =
New value ? initial value
? 100
Average value
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Using Equations to Compute Missing Values (1 of 2)
?(??????? ????????? ????? ????? ?????????1 ????2)
It will often be useful to compute the value of the numerator or the denominator
of an equation. For example, if we know the change in work hours, and the slope
of the line relating change in income and change in work hours:
? ??? ??? ???? ????????? ??? ???? ???????.?????? ?? ?????? ?? ???? ?? ??????? ???? ???? ????? ?? ???? ?????????
😕 ???? ???? ??????? ???????? ?? ????? ???????? ?? ????? ?????????? ????? ??????
Slope =
?Work hours ? Slope = ?Income
?Income
?Work hours
?Income = ?Work hours ? Slope
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Using Equations to Compute Missing
Values (2 of 2))2 ? ???2( ???????? ????????? ????? ????? ?????????
?Income = ?Work hours ? Slope
Then, if you work seven extra hours, and the slope of this line is $8 per hour,
then your change in income is:
? ?? ??????? ?? ???????? ??????? ?? ???????8 ? ???? ??? ???? ????? ??? ??? ???? ??? ????? ????????????
:?????? ?? ???
?Income = 7 hours ? $8per hour
?Income = $56
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Key Terms (Appendix))?????????? ???????? (????????
Negative relationship
Positive relationship
?????? ??????
?????? ????????
???? ??????
Slope of a curve
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Survey of Economics: Principles,
Applications and Tools
Eighth Edition
Chapter 2
The Key Principles of
Economics
???????? ???????? ?????????
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Chapter Outline
2.1 The Principle of Opportunity Cost
2.2 The Marginal Principle
2.3 The Principle of Voluntary Exchange
2.4 The Principle of Diminishing Returns
2.5 The Real-Nominal Principle
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2.1 The Principle of Opportunity Cost ? ???? ????? ?????? ????????2.1
Apply the principle of opportunity cost. .?????? ???? ????? ?????? ????????
Economics is all about making choices; to make good choices, we must
compare the benefit of something to its cost.
??? ???????? ?? ?? ??? ?? ????? ????????? ?? ?? ??? ?? ???? ?? ???? ?? ?? ?? ?? ?? ?????????
.? ??? ?? ????? ????? ??? ?? ???????????? ?????? ?????? ?????
Opportunity Cost: What you sacrifice to get something.
There is no such thing as a free lunch
.? ?? ??? ???? ?????? ??? ????: ????? ????????
?”?? ???? ??? ??? ???? ???? ???????
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Application 1: The cost of doing business ? ????? ?????? ????????:1 ?????????
Jack left a job paying $60,000 per year to start his own florist
shop in a building he owns. The market value of the building
is $80,000. He pays $30,000 per year for flowers and other?
supplies, and has a bank account that pays 5 percent
interest. What is the economic cost of? Jack’s business?
?????? ??? )???(????60 ???? ????? ????? ????? ????? ????? ???? ?????? ?? ???? ????? ???? ???????
???????? ???????80,000 ???????. ???? ?????30 ????? ????? ????? ????? ?????? ?????? ?? ??????????
?????? ???? ????? ???? ????? ??????5 ??? ??????. ??? ?? ??????? ?????????? ?????? ?????
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The Cost of Military Spending
?????? ??????? ????????
The war in Iraq cost the United States an estimated $1 trillion. Each $100 billion
could:
😕 ????? ????? ???? ???100 ? ???.?????? ?? ?????? ???? ???????? ??????? ?? ???? ???????? ??????
Enroll 13 million preschool children in the Head Start program for one year
? ????? ??? ?? ????? ?? ??? ??????? ?? ???????13 ???????Head Start .????? ??? ?????
Hire 1.8 million additional teachers for one year.
.? ????? ???? ????? ???? ??? ?????1.8 ????
