3. Allah-lah yang telah menciptakan langit dan bumi dan menurunkan air (hujan)
dari langit, kemudian dengan (air hujan) itu Dia mengeluarkan berbagai buah-
buahan sebagai rezeki untukmu; dan Dia telah menundukkan kapal bagimu
agar berlayar di lautan dengan kehendak-Nya, dan Dia telah menundukkan
sungai-sungai bagimu.
4. PPF
1. The meaning of PPF (Explain PPF
Curve)
2. Opportunity Cost
3. Economic Growth and Decline
4. Consumption VS Investment
5. Efficiency
6. Choice
Discuss with your Group!
5.
6. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
7. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
• choices and opportunity cost
8. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
• choices and opportunity cost
• increasing opportunity cost
9. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
Units of food Units of clothing
(millions) (millions)
8m 0.0
7m 2.2m
6m 4.0m
5m 5.0m
4m 5.6m
3m 6.0m
2m 6.4m
1m 6.7m
0 7.0m
A production possibility curve
10. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
Units of food Units of clothing
(millions) (millions)
a 8m 0.0
7m 2.2m
6m 4.0m
5m 5.0m
4m 5.6m
3m 6.0m
2m 6.4m
1m 6.7m
0 7.0m
a
A production possibility curve
11. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
Units of food Units of clothing
(millions) (millions)
8m 0.0
b 7m 2.2m
6m 4.0m
5m 5.0m
4m 5.6m
3m 6.0m
2m 6.4m
1m 6.7m
0 7.0m
b
A production possibility curve
12. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
Units of food Units of clothing
(millions) (millions)
8m 0.0
7m 2.2m
c 6m 4.0m
5m 5.0m
4m 5.6m
3m 6.0m
2m 6.4m
1m 6.7m
0 7.0m
c
A production possibility curve
13. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
Units of food Units of clothing
(millions) (millions)
8m 0.0
7m 2.2m
6m 4.0m
5m 5.0m
4m 5.6m
3m 6.0m
2m 6.4m
1m 6.7m
0 7.0m
A production possibility curve
14. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions) A production possibility curve
15. 0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
Units of clothing (millions)
Units
of
food
(millions)
x
A production possibility curve
w
16. Units of clothing (millions)
Units
of
food
(millions) Increasing opportunity costs
x
y
0
1
2
3
4
5
6
7
8
0 1 2 3 4 5 6 7 8
1
1
z
1
2
17. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
• choices and opportunity cost
• increasing opportunity cost
– macroeconomics and the p.p. curve:
18. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
• choices and opportunity cost
• increasing opportunity cost
– macroeconomics and the p.p. curve:
• production within the curve
19. v
x
y
O
Making a fuller use of resources
Food
Clothing
Production inside
the production
possibility curve
20. The Economic Problem
• The production possibility curve
– what the curve shows
– microeconomics and the p.p. curve:
• choices and opportunity cost
• increasing opportunity cost
– macroeconomics and the p.p. curve:
• production within the curve
• shifts in the curve
30. The Economic Problem
• The circular flow of income
– firms and households
– goods markets
• real flows: goods and services
• money flows: consumer expenditure
33. The Economic Problem
• The circular flow of income
– firms and households
– goods markets
• real flows: goods and services
• money flows: consumer expenditure
– factor markets
34. The Economic Problem
• The circular flow of income
– firms and households
– goods markets
• real flows: goods and services
• money flows: consumer expenditure
– factor markets
• real flows: services of labour and other factors
37. The Economic Problem
• The circular flow of income
– firms and households
– goods markets
• real flows: goods and services
• money flows: consumer expenditure
– factor markets
• real flows: services of labour and other factors
• money flows: wages and other incomes
40. The Economic Problem
• The circular flow of income (cont.)
– macroeconomic issues
• the size of total flows
– microeconomic issues
• individual markets
• choices within goods and factor markets
41. Answer Activity 1
Positive statements include those that are
verifiable such as ‘one physician for every
1,800 people’ or ‘1.4 per cent of GDP is spent
on public health’.
Normative statements are value judgements
and include, ‘The majority of the Indian
population is truly disenfranchised’, or ‘Public
healthcare is completely broken’
42. Answer of Exam
a) A positive statement can be proven to be true or false and
relies on verifiable evidence. The article states that India’s
current spending on education is 3.8 per cent of its Gross
Domestic Product (GDP). This is contrasted with other
countries such as Germany, which spends 5.9 per cent of its
GDP on education. The article also states that only 4.7 per
cent of the labour force has any formal training. Both these
statements are positive because they can be verified.
By contrast, it states that India could become a major supplier of
skilled and qualified workers. This may, or may not, turn out to
be true, the point is that however worthy an aim it may be, it is
not verifiable by rational analysis. It also states that some
teachers do not come up to standard but no evidence of this is
offered. Therefore, both of these statements can be said to be
normative ones.
•
43. (b) Spending on education can take the form of building more schools,
employing more teachers and providing better equipment. It is likely that this
will improve the standards of education and training in India. This will benefit
Indian firms who will gain a more efficient and productive workforce. The
products and services they produce will be more competitive, leading to higher
sales and profits. The economy will see an increase in output or GDP and tax
revenues, enabling the government to expand its spending programmes. The
workers themselves are likely to earn more money, leading to increased
expenditure and more demand for goods and services, once again stimulating
GDP.
However, increased spending on education must be funded and this may mean
spending in other areas has to be cut; this could have a detrimental effect
elsewhere, if for example, healthcare or housing are cut. Increased spending on
education does not guarantee it will be effective. It depends on how the money
is spent and by how much it is increased. It will also take time for the benefits
to appear
