I happened to download Fuying's Microeconomics textbook yesterday and read part of it randomly. To my surprise, it's a great subject! I've never had the positive experience reading a textbook.?

The first chapter is the introduction of AP Microeconomics Exam, which consists mainly two parts: Multiple Choices Questions and Free Response Questions.

The Multiple Choices Questions part gives each attendant 70mins to accomplish 60 questions, each of which contains 5 choices. This part weighs two third of the scores. You can tell from the information that there's not much time to spend thinking too long for each question.?

The Free Response Questions part weighs one third of the whole scores. Together attendants will be given 60mins to answer 3 questions, including 10mins preparing and 50mins writing the answers. During the 10-min preparing time, attendants can only read the questions and think about it. They are not allowed to write anything on the responding sheet.?

基本概念/稀缺性/相對優(yōu)勢/機(jī)會成本/經(jīng)濟(jì)體制/生產(chǎn)可能曲線/供給需求/市場均衡基本原理與彈性

The Basic Concepts and Graphs of Economics

There are many definitions about what economy is by many economists. The book prefers the definitions as follow.?

Economics is the social science concerned with how individuals, institutions, and society make optimal(best) choices under conditions of scarcity.

Microeconomics focuses on the individual parts of the economy such as a person, a household, a firm, or an industry. ?

When doing the microeconomics analysis, the economist looks at the economic phenomena mainly from perspective of persons and firms. The core concept in microeconomics is supply and demand.?

Macroeconomics observes economy as a whole or its basic subdivisions, such as government and business sectors.

Macroeconomics speaks of such economic measures as total output, total employment, the general level of prices, fiscal policy and financial policy, etc.

Scarce resource

Scarcity means that society has limited resources and cannot produce all the goods and provide all the resource people wish to have.?

Economy is the study of how society manages its scarce resources.

Choices people face

In our daily life, when we want to get one thing we have to give up another thing. For example, since our income is limited, we must choose between food and clothing. Since our time is limited, we must choose between leisure time and working hours. You cannot have you cake and eat it. I cannot learn economy after work and watch films.?

Absolute advantage?

Absolute advantage means the comparison among producers of a good according to their productivity. I can still remember Tim showed us the example of Brazil and the U.S. According to the productivity of producing big planes, the U.S has an absolute advantage over Brazil.

Opportunity cost

The opportunity cost of an item is what we give up to get that item.

Comparative advantage

The producer who has the smaller opportunity cost of producing a good is said to have comparative advantage. Take producing planes as an example. Though the U.S has a absolute advantage producing planes no matter big or small, it cannot produce all the planes of the world and sell them for money. With limited resources, they can produce more big planes and less small planes and trade to get their ideal target.? Under this circumstance, Brazil loses less by producing more small planes.

Marginal thinking

Marginal changes are small, incremental adjustments to an existing plan of action. When we learn economy, we must learn to think the margin. If we want to arrange our time for learning, whether we should spend another hour learning? If we produce one good, what is the marginal revenue and what is the marginal cost? Take our institution as an example, the standard number of a class is 8, if the number reaches 9 then we have to start another class and divide the group into two parts. The revenue we get from the 9th student is the marginal benefit. And the money we have to pay for the extra teacher is the marginal cost. When the marginal benefit outnumbers the marginal cost, we can start another class.?