5. Economic terms
• Economics studies economic activities.
• Economic activities include all the jobs done to satisfy people’s needs
by providing goods and services.
8. Production factors/ Economic resources
- all things needed in an economic activity
- 4 groups: natural resources, capital resources, labor, technology
9. Why do people have to choose to use resources?
Resources are limited/ scarce.
Limited resources >< unlimited human’s wants
One conflict: mâu thuẫn trong kinh tế học.
10. 2 branches of economics
Microeconomics and macroeconomics
11. Microeconomics
• Studies the economic activities of individuals, industries
• 3 themes:
+ limits and allocation of limited resources among microeconomic
agents (making optimal trade-offs among microeconomic agents)
+ role of price
+ role of market
12. • Trade- offs
A trade-off is a situation where you make a compromise between two things.
Why do people have to make trade offs?
What are some limited resources among consumers, workers and firms?
13. Limits and making optimal trade-offs among
economic agents
• In different economic systems
• Among microeconomic agents
14. Planned economy
Socialism: public ownership- laborers- gov/ state
state ownership
• Direct interference by government: production and
consumption
+ what to produce, how to produce, how many, how
to distribute
+ how many to consume
15. Free market economy
• Capitalism: Private ownership of means of production
Buyers and sellers are free to choose to use their resources
16. Making trade-offs in different economic systems
• In planned economy: trade-offs are made by government
• In free market economy: making trade-offs is more flexible,
decided by consumers, workers and firms.
17. Making optimal trade-offs among
microeconomic agents
1. Which limited resource do they have/ face?
- Consumers have/face limited…….
- Consumers face constraints (hạn chế) in …….
2. Example about trade- off.
Trade off (v) sth with/ for sth
Trade off V-ing with/ for V-ing
Choose to V and choose not to V…
18. Consumers
Consumers have limited income.
They can spend on a variety of goods or save for the future.
= they trade off spending (current consumption) with saving (future
consumption).
They trade off buying more of some goods with buying less of others.
19. Consumer theory (thuyết hành vi người tiêu
dùng)
• Describes how consumers, based on their preferences and limited
income, decide to spend/ use their money to maximize their well-
being.
20. Workers
Workers face constraints (limits): time, education, skills……
They trade off working now with continuing education.
They trade off working for a large/ big corporation with working for a small
company/ working for gov with working for private company.
They can choose the type of job to work.
They trade off labor for leisure.
21. Firms
Firms have/ face limited financial resources (capital), technology,….
Firms trade off producing this product with that product Firms can
choose what to produce.
Firms trade off hiring more workers with building new factories.
23. Role of market
Market is the place where economic agents (consumers, workers,
firms) interact.
In centrally planned economy, price is decided by the gov.
In free market economy, the price of a good is decided in the market by
the interactions between economic agents such as consumers and
suppliers.
24. Short questions
1.What does microeconomics study?/ What is the definition of microeconomics?
2.Who decides the allocation of resources in planned economy? Free market economy?
3.What are 3 themes in microeconomics?
4.What does trade off mean?
5.Why do people make trade- offs?
6.What are some limited resources among consumers, workers, firms?
7.Give examples of trade off among consumers, workers, firms?
8.What does theory of consumer indicate? Theory of the firm indicate?
9.How is price important in the market economy?
10.How is price determined in planned economy/ free market economy?
25. Topic questions
1.Discuss allocation of resources in microeconomics.
2.What does microeconomics study?
3.What are some limited resources of consumers? How do they allocate
resources?/ What are some examples of trade offs among consumers?
4.………….workers? Firms?
5.What are important roles of prices in the economy?
6.What does economics study?
26. Macroeconomics
• Studies the economic activities of a country, international
marketplace.
• Macroeconomics provides a bird’s eye view of a country’s economic
landscape.
• Macroeconomics looks at overall economic trends.
27. GDP: gross domestic product: a measure of total value of goods and services
produced in a country in a period of time.
GNP: gross national product: a measure of total value of goods and services
produced by a country’s citizens (công dân) in a period of time.
28. Inflation: a rise in general level of price of goods due to an increase in money
supply.
Balance of payments: difference between total payments to foreign
nations and total receipts from abroad over a period of time.
29. • Government regulates/ stabilizes economy by economic policies: fiscal and
monetary policy
+ policy maker
+ what policy controls
+ Goal of 2 policies
30. Fiscal policy Monetary policy
Decision
maker/
supervisor
Ministry of Finance Central Bank
(state bank, Fed)
Control
Government’s revenue: tax, debt
(borrowing), fees for public services,
investment, aid packages (grants)
Government’s spending: salaries,
national defense and security, social
security, building infrastructure,…
A nation’s money supply
Money supply: total amount of
money in a country’s economy.
Aims Promote economic growth
Keep inflation under control
31. Micro
• Studies decisions/ behavior of
individual agents: consumers,
firms, workers,….
• Focus on consumer theory,
theory of the firm
• Demand and supply, how they
determine the price, specific
market,
Macro
• Studies decisions/ performance of
the economy as a whole: a
national, regional, global economy
• Focus on the policies the gov uses
to regulate the economy
• Aggregated indicators: GDP,
unemployment rate….,
interrelation between factors in the
economy……
32. Short questions
1.What is the goal of macroeconomics?
2.What are 2 macroeconomic policies?
3.Who supervises Fiscal policy? Monetary policy?
4.What are objectives of 2 macroeconomic policies?
5.What does fiscal policy control?
6.What does monetary policy control?
7.Why is it said that micro and macroeconomics interdependent and complement each other?
8.What is inflation? GDP? Balance of payments?
33. Topic questions
1. What does macroeconomics study?
2. What are some differences between micro and macroeconomics?
