"Common Ground": Curso: Ingles Técnico 1ra Lectura Docente: Mg. Ing. Econ. Polan F. Ferró Gonzales

CURSO: INGLES TCNICO
1ra Lectura
Docente: Mg. Ing. Econ. Polan F. Ferr Gonzales
COMMON GROUND1
The annual meeting of the American Economic Association draws
thousands of economists, young and old, famous and obscure. There
are booksellers, business meetings, and quite a few job interviews.
But mainly the economists gather to talk and listen. During the
busiest times, 60 or more presentations may be taking place
simultaneously, on questions that range from the future of the stock
market to who does the cooking in two-earner families.
What do these people have in common? An expert on the stock
market probably knows very little about the economics of
housework, and vice versa. Yet an economist who wanders into the
wrong seminar and ends up listening to presentations on some
unfamiliar topic is nonetheless likely to hear much that is familiar.
The reason is that all economic analysis is based on a set of common
principles that apply to many different issues.
Some of these principles involve individual choicefor economics is,
first of all, about the choices that individuals make. Do you choose to
work over the summer or take a backpacking trip? Do you buy a new
CD or go to a movie? These decisions involve making a choice among
a limited number of alternativeslimited because no one can have
everything that he or she wants. Every question in economics at its
most basic level involves individuals making choices.
But to understand how an economy works, you need to understand
more than how individuals make choices. None of us are Robinson
Crusoe, alone on an islandwe must make decisions in an
environment that is shaped by the decisions of others. Indeed, in a
modern economy even the simplest decisions you makesay, what to
have for breakfastare shaped by the decisions of thousands of
other people, from the banana grower in Costa Rica who decided to
grow the fruit you eat to the farmer in Iowa who provided the corn in
your cornflakes. And because each of us in a market economy
depends on so many othersand they, in turn, depend on usour
choices interact. So although all economics at a basic level is about
individual choice, in order to understand how market economies
behave we must also understand economy-wide interactionhow my
choices affect your choices, and vice versa.
1 Material extrado y adaptado de la Bibliografa citada en el Silabo del
curso.
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1ra Lectura
In this lecture, we will look at nine basic principles of economics

four principles involving individual choice and five involving the way
individual choices interact.
Principles That Underlie the Economics of Individual Choice
1. Resources are scarce.
2. Opportunity Cost: The real cost of something is what you must
give up to get it.
3. How much? is a decision at the margin.
4. People usually exploit opportunities to make themselves better
off.
Principles That Underlie the Interaction of Individual Choices
1. There are gains from trade.
2. Markets move toward equilibrium.
3. Resources should be used as efficiently as possible to achieve
societys goals.
4. Markets usually lead to efficiency.
5. When
markets
dont
achieve
efficiency,
government
intervention can improve societys welfare.
CHECK YOUR UNDERSTANDING
1. Explain how each of the following situations illustrates one of the
four principles of individual choice.
a. You are on your third trip to a restaurants all-you-can-eat
dessert buffet and are feeling very full. Although it would cost
you no additional money, you forgo another slice of coconut
cream pie but have a slice of chocolate cake.
b. Even if there were more resources in the world, there would
still be scarcity.
c. Different teaching assistants teach several Economics 101
tutorials. Those taught by the teaching assistants with the best
reputations fill up quickly, with spaces left unfilled in the ones
taught by assistants with poor reputations.
d. To decide how many hours per week to exercise, you compare
the health benefits of one more hour of exercise to the effect on
your grades of one less hour spent studying.
2. You make $45,000 per year at your current job with Whiz Kids
Consultants. You are considering a job offer from Brainiacs, Inc.,
which will pay you $50,000 per year. Which of the following are
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1ra Lectura
elements of the opportunity cost of accepting the new job at

Brainiacs, Inc.?
a. The increased time spent commuting to your new job
b. The $45,000 salary from your old job
c. The more spacious office at your new job
3. Explain how each of the following situations illustrates one of the
five principles of interaction.
a. Using the college website, any student who wants to sell a
used textbook for at least $X is able to sell it to another who is
willing to pay $X.
b. At a college-tutoring co-op, students can arrange to provide
tutoring in subjects they are good in (like economics) in return
for receiving tutoring in subjects they are poor in (like
philosophy).
c. The local municipality imposes a law that requires bars and
nightclubs near residential areas to keep their noise levels
below a certain threshold.
d. To provide better care for low-income patients, the city of
Tampa has decided to close some underutilized neighborhood
clinics and shift funds to the main hospital.
e. On the college website, books of a given title with
approximately the same level of wear and tear sell for about
the same price.
4. Which of the following describes an equilibrium situation? Which
does not? Explain your answer.
a. The restaurants across the street from the university dining
hall serve better-tasting and cheaper meals than those served
at the university dining hall. The vast majority of students
continue to eat at the dining hall.
b. You currently take the subway to work. Although taking the
bus is cheaper, the ride takes longer. So you are willing to pay
the higher subway fare in order to save time.
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"Common Ground": Curso: Ingles Técnico 1ra Lectura Docente: Mg. Ing. Econ. Polan F. Ferró Gonzales

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CURSO: INGLES TCNICO

CURSO: INGLES TCNICO

In this lecture, we will look at nine basic principles of economics

CURSO: INGLES TCNICO

elements of the opportunity cost of accepting the new job at

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