Economics
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Economics

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    Economics Economics Presentation Transcript

    • Economics Economics is a social science that studies choices that people, businesses, government and entire societies make as they cope with scarcity. There are two types of economics: Macroeconomics Microeconomics
    • Factors of production Economics depend on the following four factors of production: Land Labour Capital Entrepreneurship
    • Demand and Supply If you demand something you: Want it Can afford it Plan to buy it
    • Law of DemandThe law of demand states: Other things remaining the same, the higher the price of a good, the smaller is the quantity demanded; and the lower the price of a good, the greater is the quantity demanded.
    • Factors bring changes in demand Expected future prices Income Expected future income Population Preferences
    • Supply If a firm supplies a good or service, the firm: Has the resources and technology to produce it, Can profit from producing it Plans to produce and sell it.
    • Law of SupplyOther things remaining the same, the higher the priceof a good, the greater is the quantity supplied; andthe lower the price of a good, the smaller is thequantity supplied.
    • Factors that brings change in supply  The prices of productive resources  The prices of related goods produced  Expected future prices  The number of suppliers  Technology
    • ElasticityPrice elasticity of demand is a unit free measure of the responsiveness of the quantity demanded of a good to a change in its price when all other influences on buyers’ plans remain the same.Calculating Price Elasticity of DemandPrice Elasticity of Demand:Percentage change in quantity demanded Percentage change in price
    • Types of elasticity of demand Perfectly inelastic demand Unit elastic demand Perfectly elastic demand