Chap 1: Economists study

+How people make decisions

(Work, buy, save, invest)
+How people interact with one another
 micro
+The forces and trends that affect the
economy as a whole
 macro

*How people make decisions (session 4+5)

Prin 1: People face trade-offs, making decisions
Prin 2: Opportunity cost (Whatever must be given up to obtain
some item)
Prin 3: rational people – marginal benefits (add enough) > marginal costs (the
extra cost of producing sth)
marginal changes (bring different value at different time)
Prin 4: incentives (induce people act, eg: sale off )

*How people interact with one another (session 2+3)

Prin 5: trade
Prin 6: market (Communist countries, central planning)
Prin 7: government (Enforce rules and maintain institutions, enforce property
rights, Promote efficiency, equality, avoid market failure)

* The forces and trends that affect the

economy as a whole (session 7-end)
Prin 8: Standard of Living -> high productivity
Prin 9: inflation
Prin 10: inflation vs unemployment

Chap 2: The Economist as Policy Adviser

Positive statements: descriptive
Attempt to describe the world as it is
-Confirm or refute by examining evidence:
“Minimum-wage laws cause
unemployment”

Normative statements: prescriptive

-Attempt to prescribe how the world should
be: “The government should raise the
minimum wage”

Chap 3: Interdependence and the Gains from Trade

*absolute advantage (lợi thế tuyệt đối)
at fewer inputs
same inputs -> higher outputs

*comparative advantage (lợi thế tương đối)

not above the frontier, can be in and on

*One person
-Can have absolute advantage in both goods
-Cannot have comparative advantage in both
Goods

For different opportunity costs

-One person has comparative advantage in
one good
-The other person has comparative
advantage in the other good
 (manager can do well in all fields, but he still hire s.o to help him, so he
can concentrate on his business)

Chap 3:
1c
2d
3b
4c
5d
6a
7c
8a
9 M ab in lau
 J ab in cook, also have com in cook
C
11b
14b
19 hình
20 hình

Note: Switch session 6 and 7