Kneel for the after-class answer of Economics Principles edited by Tan Chunzhi.

The first introduction Chapter 1 Ten Principles of Economics 1. Give three examples of important trade-offs you face in your life. Answer: ① After graduating from college, faced with the choice of whether to pursue further studies, choosing to continue studying as a graduate means giving up the opportunity to work, earn wages and accumulate social experience in the next three years; 2. There are also important trade-offs in learning content. If you study economics, you have to spend less time studying English or other specialized courses. You will also have to make a choice in the distribution of a small amount of living expenses. If you want to buy more books, you have to cut down on eating and buying clothes. 2. What is the opportunity cost of watching a movie? A: The opportunity cost of watching movies is the biggest profit you can get from doing other things during movie time, such as reading books and doing odd jobs. Water is necessary for life. Is the marginal benefit of a glass of water large or small? A: It depends on the circumstances under which this glass of water is drunk. If this is the fifth glass of water that a person drinks in five minutes, then his marginal income is very small and may be negative. If this is the first glass of water that an extremely thirsty person drinks, then his marginal income will be great. 4. Why should decision makers consider incentives? A: Because people will respond to incentives. If the policy changes incentives, it will make people change their behavior. When decision makers fail to consider how behavior changes due to policies, their policies often produce unexpected results. Why doesn't trade between countries have winners and losers like competitions? A: Because trade enables countries to specialize in what they are best at and enjoy all kinds of goods and services from it. Through trade, the material wealth available for consumption in various countries has increased and the economic situation has improved. Therefore, all trading countries are both competitors and economic partners. In fair trade, it is the result of "win-win" or "win-win". 6. What is the "invisible hand" of the market towel doing? A: The "invisible hand" in the market is the commodity price, which reflects the value and social cost of the commodity itself. Enterprises and families in the market should pay attention to the price when making business decisions. So they will unconsciously consider the (social) benefits and costs of their actions. Therefore, this "invisible hand" guides millions of individual decision makers to maximize social welfare in most cases. Explain the two main reasons for market failure and give an example each. A: The main reasons for market failure are externalities and market forces. Externality is the influence of a person's behavior on the interests of onlookers. Externality arises when a person fully bears (or enjoys) the costs (or benefits) caused by his actions. For example, if a person does not bear the full cost of smoking in public places, he will smoke without restraint. In this case, the government can increase economic welfare by formulating rules and regulations prohibiting smoking in public places. Market power refers to the ability of a person (or a small group of people) to improperly influence market prices. For example, a monopoly producer of a commodity can charge consumers an exorbitant monopoly price because it is hardly affected by market competition. In this case, economic efficiency can be improved by stipulating the price charged by the monopolist. 8. Why is productivity important? A: Because a country's living standard depends on its ability to produce goods and services, and the most important criterion to measure this ability is productivity. The higher the productivity, the more goods and services a country produces. What is inflation and what causes it? A: Inflation is the devaluation of currency caused by the increase of the amount of money in circulation and the rise of the overall price level in life. The increase in the amount of money led to inflation. 10. What is the relationship between inflation and unemployment in the short term? A: In the short term, there is a trade-off between inflation and unemployment, which is caused by the slow adjustment of some prices. In order to curb inflation, the government will reduce the amount of money in circulation, and the amount of money people can consume will decrease, but commodity prices will remain high in the short term. In this way, the number of goods and services consumed by society will decrease, and the decrease in consumption will lead to the dismissal of workers by enterprises. In the short term, curbing inflation increases unemployment. Problems and applications 1 describes the trade-offs faced in the following situations: a. A family decides whether to buy a car. A: If you buy a new car, you must reduce other household expenses, such as traveling and buying new furniture. If you don't buy a new car, you won't enjoy the convenience and comfort of driving a new car out. Members of Congress decide how much to spend on national parks. A: A large amount of expenditure on national parks can improve the conditions of national parks and better protect the environment. But at the same time, the government's expenditure on communications, posts and telecommunications and other public utilities will be reduced. The president of a company decides whether to open a new factory. A: Opening a new factory can expand the scale of enterprises and produce products. However, there may be less funds for enterprise research and development. In this way, the progress of enterprises in developing new products and using new technologies may slow down. Teaching AIDS determine the time to prepare the course. A: If professors spend most of their time on their own research, they may get good results, but the reduction of preparation time will affect the quality of teaching students. You are trying to decide whether to go on holiday or not. Most of the cost of vacation (air tickets, hotels, salary abandonment) is measured in dollars, but the benefits of vacation are psychological. How will you compare the benefits and costs? A: This psychological gain can be measured by whether the set goals have been achieved. For the established goal to be made before this action, we must have a cost range that we are willing to bear in order to achieve the goal. Within this affordable range, if the holiday meets the established goals, such as relaxing and restoring physical strength. Then it can be said that the income of this holiday is at least not lower than its cost. You are going to take a part-time job on Saturday, but a friend invites you to go skiing. What is the real cost of going skiing? Now suppose you plan to study in the library this day. What is the cost of skiing in this case? And explain. A: The real cost of going skiing is the salary I can get when I work on Saturday. I could have used this time to work. If I plan to study in the library this day, the cost of skiing is the knowledge I can gain during this time. You won 100 dollars in the bet on the basketball game. You can choose to spend it now, or deposit it in a bank account and pay 5% interest a year. What is the opportunity cost of spending 100 dollars now? A: The opportunity cost of spending $65,438+000 now is to get a bank payment of 105 (interest L principal) o5 one year later. The company you manage has invested 5 million dollars to develop new products, but the development work is far from complete. At a recent meeting, your salesperson reported that the entry of competitive products reduced the expected sales of your new product to $3 million. If this development is completed, it will cost $6,543,800+0,000. Should you continue to develop like this? How much money should you spend at most to complete this development? A: This development should continue. Because now its marginal income is $3 million, and its international cost is $654.38+$00,000. In order to complete this development, I can spend another $3 million at most. As long as the marginal revenue is ten times greater than the marginal cost, it will be profitable. Three managers of Magic Beverage Company are discussing the possible increase in production. Every manager suggested a way to make this decision: Harry: We should check whether the productivity of our company-the number of gallons produced by each worker-has increased or decreased. Ron: We should check whether our average cost-the cost per worker-has gone up or down. Helmney: We should check whether the extra income from selling an extra gallon of drinks is greater than or less than the extra cost. Who do you think is right? Why? A: I think Helmuni's decision-making method is correct. Because only the extra income from selling an extra gallon of drinks exceeds its extra cost can it be profitable to sell an extra gallon of drinks. Rational people should consider marginal quantities. 7. The social security system provides income for people over 65. If a social security recipient decides to work and earn some money, his or her social security allowance will usually be reduced. A. How does the provision of social security affect people's motivation to save during working hours? A: The provision of social security enables people to earn income after retirement to ensure their livelihood. Therefore, people don't have to worry about the living expenses when they can't work, and their savings will be reduced during their work. B how does the reduction of allowances related to higher income affect the work motivation of people over 65? A: The reduction of allowances related to high income will make people over 65 stop working actively. Because hard work and high salary will reduce the allowance, people over 65 will have less motivation to work hard. The recent bill to reform the government's poverty alleviation program limited many welfare recipients to two years' allowance. How do these changes affect work motivation? A: The reform of this anti-poverty plan bill will encourage welfare recipients who can only receive two-year allowance to work hard. If they can't find jobs within two years, these welfare recipients will have no income after two years. How do these changes reflect the trade-off between equality and efficiency? A: These changes reflect the intention of bill reformers to improve efficiency and appropriately reduce fairness. 9. Your roommate cooks better than you, but you clean the room faster than your roommate. If your roommate does all the cooking and you do all the cleaning, it will take more time than if you share each job equally. Or it will take you less time. Give a similar example to illustrate how specialization and trade can make the situation in Tao country better. Answer: When each of us undertakes the work we are good at, it takes less time than we share each job on average, because skilled skills improve work efficiency. For example, suppose that country A is better at producing silk than country B, and country B produces fur products more efficiently than country A. If country A specializes in producing silk and country B specializes in producing fur products, the productivity of the two commodities will be improved due to their respective advantages in related production. There are some silk and fur products on the market. In this way, the professional division of labor and mutual trade between A and B make silk and fur products available to consumers in both countries, and the living standards of both countries have been improved. 10, suppose that the American economy adopts central planning, and you become the main voice of the plan. In the next 1 year, you need to make millions of decisions, including how many CDs to produce, which artists' CDs to record, and who should get them. What information do you need about the CD industry in order to make these decisions rationally? What information do you need about everyone in America? A: I need to know the annual sales volume and development trend of the CD industry, the sales situation of each CD, the production capacity, production cost and profit level of CD companies and companies. For everyone in America, I need to know whose records they like, how many records they will make a year, and their willingness to pay for different records. B how does your decision about CD affect your other decisions, for example, how many CD players or cassette tapes to produce? How will your other economic decisions change your view of CDs? A: Because CDs have substitutes and supplements, the production decision of CDs will affect the production decision of their substitutes and supplements. If we want to increase the output of CD, we should increase the output of its supporting products and correspondingly reduce the output of substitutes, for example, increase the output of CD players and reduce the output of cassette tapes. Conversely, the production decision of optical disc will also be influenced by the production decision of its substitutes and supplements. 1 1. Explain whether the following government activities are out of concern for equality or efficiency. In the case of efficiency, discuss the types of market failures involved. Control the price of cable TV channels. A: This is a question of efficiency. The reason of market failure is the existence of market forces. There may be only one cable TV station in a certain place, and because there is no competitor, cable TV stations will charge consumers of cable channels a price higher than the equilibrium price in the currency field, which is monopoly. Monopolizing the market cannot make the most effective allocation of scarce resources. In this case, setting the price of cable TV channels will improve market efficiency. Give some poor people tickets that can be used to buy food. A: This is out of concern for equality, and the government hopes to distribute the economic cake to everyone more fairly. Smoking is prohibited in public places. A: This is for the sake of efficiency. Because smoking in public places will pollute the air, affect the health of non-smokers around, and produce harmful externalities to society, and externalities are a market failure, which is also the reason why the government prohibits smoking in public places. Split Mobil Oil Company (which once owned 90% of the oil refinery) into several smaller companies. A: For the sake of efficiency, market failure is due to market forces. Mobil Oil Company is one of the largest companies in the oil industry in the United States, occupying a considerable market share and easily forming a market monopoly. The efficiency of monopoly market is lower than that of competitive market. Therefore, the government breaks it down for the sake of efficiency. Implement a high income tax rate for high-income people. A: Out of concern for equality, letting high-income people pay more taxes and low-income people pay less taxes is conducive to a fairer distribution of social wealth among members of society. Promulgate a law prohibiting drunk driving. A: For the sake of efficiency, market failure is caused by market externalities. Drunk driving poses a threat to others' lives, and banning drunk driving can improve the safety of drivers and passengers. 12 discuss each of the following statements from the perspective of equality and efficiency: a "The government should ensure that everyone in society gets the best possible medical service." A: The motive of this view is equality. But this will be at the expense of reducing efficiency. Everyone has the best medical care, so people will not work hard for good medical conditions, which will reduce the motivation to work. B "When workers are fired, they should be able to receive unemployment benefits until they find a new job." A: From the perspective of fairness, this statement greatly embodies equality. Unemployment benefits enable workers to make ends meet during the period from being forced to lose their jobs to finding new jobs. From the point of view of efficiency, this statement reduces the motivation of work. Because you can make a living without working until you find a new job, laid-off people will not be in a hurry to find a job. 13. In what ways is your living standard different from that of your parents or grandparents when they were young? Why are these changes happening? A: In terms of food, clothing, housing and transportation, my living standard is higher than that of my parents or grandparents when they were young. These changes have taken place because productivity has been greatly improved. Almost all changes in living standards are related to changes in productivity. High productivity can produce goods and services for people to consume. Suppose an American decides to use his income to save. If banks lend this money to enterprises and enterprises use this money to build new factories, how will this high savings accelerate productivity growth? Who do you think will benefit from higher productivity? Will society get a free lunch? A: High savings enable banks to lend money to enterprises, so enterprises can get cheaper loans from banks to invest in production, expand production scale, introduce advanced technology and equipment, train workers, improve production conditions and so on. This will increase productivity. But in the long run, high savings means less money for consumption, which will lead to lower market demand. The goods produced cannot be sold, the market is in a weak state, and the profits of production enterprises are reduced. Therefore, enterprises reduce production and even fire workers to reduce costs. Social and economic development has slowed down or even stagnated. Therefore, the productivity increase brought by high savings can only benefit the society temporarily, but not permanently. Suppose everyone wakes up the next day and finds that the government has given them an extra allowance equal to the amount of money they have. Explain how doubling the money supply will affect the following situations: a. Total expenditure on goods and services. Answer; The total amount of money spent on goods and services will increase. However, the marginal benefit of income is decreasing, and the growth rate of total money will be lower than that of people's income, and it will not double that of the past. B. the purchase amount of goods and services when the price is sticky. A: If the price is sticky, the quantity of goods and services purchased will greatly increase. Because people now have twice as much money as in the past, and the prices of goods and services are the same as in the past. C. the price of goods and services when the price can be adjusted. A: If prices can be adjusted, the prices of goods and services will rise or even double due to the increase in demand. 16 imagine that you are a decision-maker who is about to decide whether to reduce the inflation rate. In order to make a rational decision, you need to understand inflation, unemployment and the trade-offs between them? "A: I want to know how much inflation, unemployment, inflation and unemployment affect the economy, that is, how much the economy will react when the inflation string increases by one percentage point, how much the impact on society will be when the unemployment rate increases by one ten thousandth, how much the measures to curb inflation will affect the unemployment rate, and how much the trade-off between inflation and unemployment will be different. The second chapter thinks about how economics is like a science like an economist. A: Economists try to discuss economic issues with the objective attitude of scientists. Put forward theories in a scientific way, collect data, analyze these data, and try to prove or deny your own theories to study society. Economists study the economy in the same way as natural science scientists. So economics is also a science. 2. Why do economists make assumptions? A: Hypothesis can explain the world more easily. Make different assumptions about different questions, ignore the factors that have no substantial influence on the answer to the question, and highlight the substantive content, so that you can concentrate on thinking. 3. Should the economic model accurately describe the reality? A: Economic models do not need to accurately describe reality. All models are based on assumptions, and they ignore many details that will not have a substantial impact on the research results, showing us what is really important. This model simplifies reality to improve our understanding of reality. Draw and explain the economic production possibility frontier of producing milk and snacks. What would happen to production possibility frontier if a plague killed half of the cows in this economy? A: Under normal circumstances, if all possible resources are used to produce snacks, 300 kilograms can be produced. If all resources are used to produce milk, 65,438+0,000 liters can be produced. L 1 stands for production possibility frontier under normal economic conditions. If a disease kills half of the cows in this economy, production possibility frontier will move inward, that is, the L2 line. Because in the case of constant productivity, the economic resources available for producing snacks and milk are reduced. 5. Describe the concept of "efficiency" with production possibility frontier. A: If the economy can make use of all the scarce resources it gets, it can be said that the result is efficient. The points on the production possibility frontier represent the effective production level. When the economy is producing at this point, it is impossible to increase the production of one commodity without reducing the production of another. Points in the production possibility frontier represent inefficient results. For some reason, the economic output is less than what it can produce with the resources it has obtained. What are the two sub-fields of economics? Explain what to learn in each sub-field. A: Economics is divided into microeconomics and macroeconomics. Microeconomics studies individual phenomena in the economy, how families and enterprises make decisions and their mutual transactions in the market. Macroeconomics studies overall economic phenomena, including inflation, unemployment and economic growth. 7. What is the difference between empirical expression and normative expression? Give an example of each. A: Empirical expression is a descriptive view of what the world is. Normative expression is an attempt to describe how the world should operate, which is imperative. The main difference between them is how we judge their correctness. In principle, empirical descriptions can be confirmed or denied by examining evidence. The judgment of normative expression involves not only factual data, but also values. Example: Empirical statement: Issuing tradable pollutant discharge permits can effectively control pollutant discharge. Specification: The government should issue tradable pollutant discharge permits to enterprises. 8. What is the Council of Economic Advisers? A: The Council of Economic Advisers is the economic advisory body of the President and the government of the United States. It consists of three members and dozens of economists. It makes economic suggestions to the president and is responsible for writing the annual presidential economic report. 9. Why do economists sometimes make contradictory suggestions to decision makers? A: There are three main reasons why economists put forward different suggestions on the same problem: 1) Economists may have different judgments on the correctness of different theories or the size of important parameters; 2) Economists may have different values; Problems and applications 1. Describe some unusual languages used in other subjects you are studying. Why are these special terms useful? A: Assets, liabilities, owners' equity, carry-over, write-off, accrual basis and cash basis are discussed in accounting. These special terms provide a new and useful way of thinking, which enables you to understand and study accounting. 2. A common assumption in economics is that the products of different enterprises in the same industry are indistinguishable. Discuss whether this assumption is reasonable for the following industries: A. Steel A. For steel, this assumption is reasonable because the physical and chemical properties of products produced by different enterprises in the steel industry are basically the same. B. Novel A: For novels, this assumption is unreasonable. Because in the literary category of novels, the works written by different writers are very different in content and techniques. C. Wheat A: For wheat, this assumption is reasonable. Because the wheat produced by different families is basically the same as a whole. D. fast food a: for fast food, this assumption is unreasonable. The food provided by each fast food restaurant will be different in content and ambiguity. For example, there should be a big difference between foreign fast food and Chinese fast food. 3. Draw a circular flow chart and confirm the part of the model corresponding to the flow of goods and services and the flow of funds for each of the following activities. A. Sanai paid the shopkeeper $65,438+0 for 1 liter of milk. Answer: It belongs to processes (4) and (8). Consumers buy consumer goods and spend money on the market of goods and services. B.sally works in a fast food restaurant and earns $4.50 an hour. Answer: It belongs to processes (1) and (5). Sally provides labor and gets paid in the factor market. C. Salina spent $7 to see a movie. Answer: It belongs to processes (4) and (8). Salina spent $7 on the goods and services market and a movie. Stewart earned $654.38 million from his 0/0% stake in Ding Feng Industries. Answer: It belongs to processes (1) and (5). Stewart stayed in the factor market to provide capital and get dividend income. Imagine a society that produces military goods and consumer goods. We call these items "cannon" and "butter". Draw a line between the cannon and butter on the possibility of raising cattle. Explain why the shape of this boundary is most likely to protrude outward. A: Suppose that society can produce 500 guns if all resources are used to produce "cannons"; If all resources are used to produce butter, 2000 kilograms of butter can be produced. The boundary of the possibility of less production in the picture is most likely to protrude outward. This is because the opportunity cost of butter, measured by cannon, depends on the output of each product in the economy. When the economy uses most of its resources to produce butter, production possibility frontier is very steep. Because even the most suitable workers and machines for producing cannons are used to produce butter, the number of cannons abandoned by the economy increases a lot for every kilogram of butter produced. In contrast, when the economy spent most of its resources on artillery production, production possibility frontier was very flat. In this case, the most suitable resources for producing cannons have been used in the artillery industry, and the increase in the number of cannons abandoned by the economy per kilogram of butter can be ignored. Point out that this kind of economy is impossible to realize. Mark a point that can be achieved but is inefficient. A: As shown in Figure 2-3. First, the point is that it is economically impossible. Point B is an achievable but inefficient point. C suppose there are two political parties in this society, namely the Eagle Party (hoping to have a strong military force) and the Pigeon Party (hoping to have a smaller military force). It shows that the eagle party chooses one point and the pigeon party chooses one point. A: Eagle Party will choose point C, and produce as many cannons as possible and as little butter as possible. The pigeon party will choose point D, producing more butter and less cannons. Imagine an aggressive neighboring country reducing its military strength. As a result, both Eagle Party and Pigeon Party reduced their satisfactory artillery output by the same amount. Measured by the output of butter, which side gets the bigger "peace dividend" and explain. A: Measured by the output of butter, Eagle Party got a bigger "peace dividend". Under the policy of Eagle Party, the economy used most of its resources to produce cannons, even the workers and machines most suitable for producing butter were used to produce cannons, and the amount of butter abandoned by the economy for each cannon also increased greatly. So when the Eagle Party decided to produce less and eat enough, the butter output increased greatly. In contrast, the Pigeon Party originally used most of its resources to produce butter. For every kilogram of butter produced, the number of cannons abandoned by the economy was very small. Therefore, if one gun is produced less, the increase of butter will be very small. The first economic principle discussed in the first chapter is that people are faced with trade-offs. Use production possibility frontier to illustrate the trade-off between clean environment and high income. What do you think determines the shape and position of production possibility frontier? Explain what will happen in production possibility frontier if engineers develop a car engine with almost no exhaust gas. A: This topic is about the combination of clean environment and high income. On the production possibility frontier line, the two products are completely compatible; Outside production possibility frontier, this is impossible. Figure 2-4 shows that if all economic resources are used to improve the environment, people can enjoy Class A environmental conditions; If all resources are used to pay wages, the per capita income can reach l000 yuan. If people want to increase their income, they must spend less on improving the environment, so the environmental index drops. On the contrary, if you want to enjoy a clean environment, you must reduce your income. This is the trade-off between a clean environment and high-income people. I think the main factors that determine the shape and location of production possibility frontier are: the number of production factors and the technical level of this economy. If engineers develop 1 car engine with almost no exhaust gas, the technical level of improving the environment will be improved and the production possibility frontier will move outward (as shown in Figure 2-4). The invention of the automobile engine with almost no exhaust gas made the environment and income of production possibility frontier move outward. This is the fifth edition. You can't seem to find the answer you want, but there is not much difference between the versions.