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    The annual meeting of the American Economic Association draws thousands of economists, young and old, famous and obscure.

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    The annual meeting of the American Economic Association draws thousands of economists, young and old, famous and obscure.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    108 views2 pages

    1ra Lectura

    Uploaded by

    walter
    The annual meeting of the American Economic Association draws thousands of economists, young and old, famous and obscure.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 2

    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 breakfast
    are 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 others
    and 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.
    In this lecture, we will look at nine basic principles of economicsfour 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.

    1
    Material extrado y adaptado de la Bibliografa citada en el Silabo del curso.

    Pgina 1 de 2
    CURSO: INGLES TCNICO
    1ra Lectura
    Docente: Mg. Ing. Econ. Polan F. Ferr Gonzales

    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 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.

    Pgina 2 de 2

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