Fundamentals of Economics. Доловова Н.Н - 21 стр.

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21
21
1. At the same time, apple orchards decide to _____ more workers and harvest
more apples, because the benefit of selling an apple is also higher.
2. The _____ of incentives in determining behavior is important for those
designing public policy.
3. Public _____ often alter the costs or benefits of private actions.
4. Congress responded with _____ requiring car companies to make various
safety features, including seat belts, standard equipment on all new cars.
5. With seat belts in all cars, more people wear seat belts, and the _____
surviving a major auto accident rises.
6. People respond to seat belts as they would to an _____ in road conditions—by
faster and less careful driving.
7. The net effect is _____.
8. Moreover, the _____ in safe driving has a clear _____ impact on pedestrians.
LESSON 5
How People Interact
The first four principles discussed how individuals make decisions. As we go
about our lives, many of our decisions affect not only ourselves but other people as
well. The next three principles concern how people interact with one another.
Principle #5: Trade Can Make Everyone Better Off
You have probably heard on the news that the Japanese are American
competitors in the world economy. In some ways, this is true, for American and
Japanese firms do produce many of the same goods. Ford and Toyota compete for the
same customers in the market for automobiles. Compaq and Toshiba compete for the
same customers in the market for personal computers.
Yet it is easy to be misled when thinking about competition among countries.
Trade between the United States and Japan is not like a sports contest, where one side
wins and the other side loses. In fact, the opposite is true: Trade between two
countries can make each country better off.
To see why, consider how trade affects your family. When a member of your
family looks for a job, he or she competes against members of other families who are
looking for jobs. Families also compete against one another when they go shopping,
because each family wants to buy the best goods at the lowest prices. So, in a sense,
each family in the economy is competing with all other families.
Despite this competition, your family would not be better off isolating itself
from all other families. If it did, your family would need to grow its own food, make
its own clothes, and build its own home. Clearly, your family gains much from its

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