Основы экономики. Земскова Л.П. - 6 стр.

8. All modern economies are mixed – intermediate between the command and
   free-market extremes. In mixed economies, both government decisions and
   market forces affect the allocation of resources. The actual roles of the
   government and the market vary considerably among nations; the roles each
   should play are frequently intensely controversial.
9. There are two main branches of economics. Microeconomics concentrates
   on the operation of individual markets and the interactions among them.
   Macroeconomics studies the economy as a whole, concentrating on such
   issues as inflation, unemployment, and growth in total output. The same
   basic principles apply in both branches.

KEY TERMS

Scarcity
“What” , “how” , and “for whom” questions
Trade-offs
Positive versus normative economics
Production possibility frontier (PPF)
Opportunity cost
Choice at the margin
Economic growth
Efficient production
Markets
Prices Command economy
Free-market economy
Mixed economy
Microeconomics and macroeconomics

PROBLEMS

1. Suppose you lived by yourself on an island. Which of the three basic
   economic problems would you not have to solve?
2. Describe how the invisible hand would work if a large number of college
   students decided to drop out and look for full-time jobs.
3. Which of the following statements is positive and which is normative?
   Explain. (a) The rate of inflation has fallen to close to zero. (b) The rate of
   inflation has fallen close to zero, and it’s time to get the economy moving
   again. (c) The level of income is higher in the United States than in Russia.
   (d) Because people should not drink, we should tax liquor more. (e) If we tax
   liquor more, we will reduce the amount of drinking in society.
4. Explain whether the following are statements about macroeconomics or
   microeconomics. (a) The price of bananas is down this month. (b) The oil-
   price shock in 1973-1974 caused a great deal of both inflation and
   unemployment in the United States. (c) Unemployment in India is high
   relative to the level in the United States. (d) Farmers’ plantings of wheat are
   high and the weather looks good, so there should be a large harvest.
                                                                                6