Factors of Production Factors of production are the inputs used to produce goods and services

Types of Imperfectly Competitive Markets Monopolistic Competition – Many firms selling products that are similar but not identical. Oligopoly – Only a few sellers, each offering a similar or identical product to the others

“In this world nothing is certain but death and taxes.” . . . Benjamin Franklin 0 20 40 60 80 100 1789 Taxes paid in Ben Franklin’s time accounted for 5 percent of the average American’s income

International Trade What determines whether a countryimports or exports a good? Who gains and who loses from free tradeamong countries? What are the arguments that people usedto advocate trade restrictions?

Efficiency v. Equity – Efficiency means society gets the most that it can from its scarce resources. – Equity means the benefits of those resources are distributed fairly among the members of society

What is money? Notes Coins Current deposits （活期存款） other deposits with banks（银行的其它存款） Currency(现金) M3 = C + D

Microeconomics Microeconomics(微观经济学) is the study of how individual households and firms make decisions and how they interact with one another in markets

Real GDP versus Money GDP (实际GDP和名义GDP) Money GDP/Nominal GDP(名义GDP) values the production of goods and services at current prices(以现价). Real GDP(实际GDP) values the production of goods and services at constant prices(以不变价格)

Exercises Linear equations for the consumption and saving schedule take the general form C=a + bY and S=-a+(1-b)Y, where C, S and Y are consumption, saving and national income respectively. (1) Use the given data to develop specific numerical values for the consumption and saving equations. Write the using these values

Measuring the Cost of Living Inflation refers to a situation in which the economy’s overall price level is rising.(通货膨胀指经济的总体 物价水平上涨) The inflation rate is the percentage change in the price level from the previous period