Economics is social science that analyses the best way to allocate scarce resources in order to satisfy the human wants and needs.
Economists therefore study how people make decisions: how much they work, what they buy, how much they save, and how they invest their savings.
Economists also study how people interact with one another. For instance, they examine how the multitude of buyers and sellers of a good together determine the price at which the good is sold and the quantity that is sold.
Finally, economists analyze forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that cannot find work, and the rate at which prices are rising
The document discusses business cycles, which are periodic fluctuations in economic activity measured by variables like GDP and employment. Each business cycle has four phases - expansion, peak, contraction, and trough. Causes of business cycles include both external factors like wars, scientific developments, and weather as well as internal factors like over-investment, under-consumption, credit expansion, and psychological factors like changing optimism and pessimism. Measures to control business cycles include fiscal and monetary policy, economic reforms, international cooperation, planning, and creating investment-friendly environments.
This document discusses buffer stocks and their potential to stabilize commodity prices like cocoa. It explains how a buffer stock would work by purchasing excess supply when prices fall below a lower target to increase demand, and selling when prices rise above an upper target to increase supply. However, buffer stocks face challenges like not being large enough to truly impact world prices. The document also presents alternatives to buffer stocks like infrastructure investment and diversification that could better help farmers over the long run.
The document summarizes key concepts from the theory of demand, including:
1) Marginal utility analysis explains the relationship between quantity demanded and price, and how demand varies in response to price changes. The marginal utility approach defines marginal utility as the change in total utility from consuming an additional unit of a good.
2) The law of diminishing marginal utility states that the marginal utility of consuming additional units of a good declines as consumption increases.
3) The law of equi-marginal utility holds that consumers will allocate their budget in a way that equalizes the marginal utility per rupee spent across different goods, achieving maximum total utility.
This document discusses elasticity and its application in business economics. It defines elasticity as a measure of how buyers and sellers respond to changes in market conditions. It then focuses on price elasticity of demand, explaining it as the percentage change in quantity demanded given a percentage change in price. The document provides examples of how to compute price elasticity of demand using percentage change formulas. It also discusses determinants of price elasticity and how elasticity relates to total revenue. Finally, it briefly introduces income elasticity of demand and cross price elasticity of demand.
This document summarizes key concepts in consumer behavior and utility analysis:
- It outlines consumer behavior, total utility, marginal utility, and cardinal and ordinal utility analysis.
- It explains the law of diminishing marginal utility using an example schedule. As consumption increases, marginal utility decreases while total utility initially increases but at a decreasing rate.
- It also explains the law of equi-marginal utility, which states that total utility is maximized when the marginal utility per unit of expenditure is equal across goods, given a consumer's budget. An example schedule demonstrates this.
- The document notes some assumptions and limitations of these economic laws and concepts.
1) General equilibrium analysis studies when all markets in an economy are simultaneously in equilibrium. It looks at the interdependence between economic agents.
2) The model assumes two goods, two consumers, two factors of production (labor and capital), perfect competition, and profit/utility maximization.
3) Equilibrium in production occurs when firms maximize profits by equalizing marginal rates of technical substitution between goods. Equilibrium in exchange occurs when consumers maximize utility by equalizing marginal rates of substitution between goods with their budget constraints.
4) Overall general equilibrium is reached when rates of substitution are equal between consumers and firms, meaning the economy is using its resources efficiently at the tangency point between the production possibility frontier and indifference
This document discusses key concepts relating to market structure, conduct, and performance. It outlines six key features that determine market structure, including the number of firms, market share of largest firms, nature of costs, degree of vertical integration, product differentiation, and structure of buyers. It also discusses how market structure influences the conduct and pricing decisions of businesses. Finally, it analyzes how market performance can impact structure over time through factors like market share changes, research and development spending, and productivity trends.
A monopoly is characterized by a single firm controlling the entire market for a good or service with no close substitutes. This allows the firm to set prices without competition. While monopolies can benefit from economies of scale, they also restrict output to raise prices and profits, resulting in an inefficient allocation of resources and loss of consumer welfare. Modern examples include electricity distribution networks and Google's dominance as a search engine.
The document discusses business cycles, which are periodic fluctuations in economic activity measured by variables like GDP and employment. Each business cycle has four phases - expansion, peak, contraction, and trough. Causes of business cycles include both external factors like wars, scientific developments, and weather as well as internal factors like over-investment, under-consumption, credit expansion, and psychological factors like changing optimism and pessimism. Measures to control business cycles include fiscal and monetary policy, economic reforms, international cooperation, planning, and creating investment-friendly environments.
This document discusses buffer stocks and their potential to stabilize commodity prices like cocoa. It explains how a buffer stock would work by purchasing excess supply when prices fall below a lower target to increase demand, and selling when prices rise above an upper target to increase supply. However, buffer stocks face challenges like not being large enough to truly impact world prices. The document also presents alternatives to buffer stocks like infrastructure investment and diversification that could better help farmers over the long run.
The document summarizes key concepts from the theory of demand, including:
1) Marginal utility analysis explains the relationship between quantity demanded and price, and how demand varies in response to price changes. The marginal utility approach defines marginal utility as the change in total utility from consuming an additional unit of a good.
2) The law of diminishing marginal utility states that the marginal utility of consuming additional units of a good declines as consumption increases.
3) The law of equi-marginal utility holds that consumers will allocate their budget in a way that equalizes the marginal utility per rupee spent across different goods, achieving maximum total utility.
This document discusses elasticity and its application in business economics. It defines elasticity as a measure of how buyers and sellers respond to changes in market conditions. It then focuses on price elasticity of demand, explaining it as the percentage change in quantity demanded given a percentage change in price. The document provides examples of how to compute price elasticity of demand using percentage change formulas. It also discusses determinants of price elasticity and how elasticity relates to total revenue. Finally, it briefly introduces income elasticity of demand and cross price elasticity of demand.
This document summarizes key concepts in consumer behavior and utility analysis:
- It outlines consumer behavior, total utility, marginal utility, and cardinal and ordinal utility analysis.
- It explains the law of diminishing marginal utility using an example schedule. As consumption increases, marginal utility decreases while total utility initially increases but at a decreasing rate.
- It also explains the law of equi-marginal utility, which states that total utility is maximized when the marginal utility per unit of expenditure is equal across goods, given a consumer's budget. An example schedule demonstrates this.
- The document notes some assumptions and limitations of these economic laws and concepts.
1) General equilibrium analysis studies when all markets in an economy are simultaneously in equilibrium. It looks at the interdependence between economic agents.
2) The model assumes two goods, two consumers, two factors of production (labor and capital), perfect competition, and profit/utility maximization.
3) Equilibrium in production occurs when firms maximize profits by equalizing marginal rates of technical substitution between goods. Equilibrium in exchange occurs when consumers maximize utility by equalizing marginal rates of substitution between goods with their budget constraints.
4) Overall general equilibrium is reached when rates of substitution are equal between consumers and firms, meaning the economy is using its resources efficiently at the tangency point between the production possibility frontier and indifference
This document discusses key concepts relating to market structure, conduct, and performance. It outlines six key features that determine market structure, including the number of firms, market share of largest firms, nature of costs, degree of vertical integration, product differentiation, and structure of buyers. It also discusses how market structure influences the conduct and pricing decisions of businesses. Finally, it analyzes how market performance can impact structure over time through factors like market share changes, research and development spending, and productivity trends.
A monopoly is characterized by a single firm controlling the entire market for a good or service with no close substitutes. This allows the firm to set prices without competition. While monopolies can benefit from economies of scale, they also restrict output to raise prices and profits, resulting in an inefficient allocation of resources and loss of consumer welfare. Modern examples include electricity distribution networks and Google's dominance as a search engine.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
The Solow-Swan model assumes constant returns to scale in production using capital and labor. It predicts an economy will reach a steady state equilibrium where the savings rate equals the investment needed to maintain the capital-labor ratio. The key assumptions include diminishing returns to individual inputs, exogenous population growth and technological progress, and savings being a constant fraction of income. The model shows how an economy converges over time to this steady state level of capital per worker and output per worker, regardless of its starting point.
This document discusses the concepts of demand, demand function, demand curve, individual demand, market demand, factors that affect demand, and exceptions to the law of demand. It defines key terms like quantity demanded, demand schedule, utility, and explains the inverse relationship between price and quantity demanded as reflected in the downward sloping demand curve under the law of demand. The document also discusses causes of change in demand and how they result in a shift of the demand curve, as well as features of demand for durable goods and derived demand.
This document discusses Gossen's Second Law, also known as the Law of Equi-marginal Utility. The law states that consumers will allocate their limited income across different goods in a way that equalizes the marginal utility per rupee spent. Traditionally, this meant spending to the point where the last rupee spent on each good yields equal satisfaction. Modernly, it means allocating spending such that the marginal utility divided by price is equal for all goods. The law aims to explain how consumers can maximize total utility from a given expenditure.
This document summarizes key aspects of monopolistic competition. It describes monopolistic competition as having many firms selling differentiated but similar products, with free entry and exit in the long run. In the short run, monopolistically competitive firms profit maximize at a quantity where price exceeds average total cost. In the long run, these firms operate at a loss and produce at a quantity where price equals average total cost, resulting in excess capacity compared to perfect competition. The document also discusses how advertising and brand names contribute to product differentiation in monopolistic competition.
This document provides an overview of international trade and development. It discusses the static and dynamic gains from foreign trade, as well as the Prebisch-Singer-Myrdal thesis on the long-term deterioration of terms of trade for developing countries. The document also examines inward-looking and outward-looking trade strategies, dual-gap analysis, and factors that affect a country's terms of trade such as differing elasticities of demand, unequal market power, technical change, and multinational corporations. Overall, the document analyzes how international trade impacts economic growth and development.
The document discusses theories of economic rent, including Ricardo's theory that rent is payment for the original qualities of land. It also discusses modern theories that rent can apply to all factors with inelastic supply. Rent is defined as any payment above the minimum needed to keep a factor in production. The document provides examples of rent on land and discusses assumptions of Ricardian theory like diminishing returns under intensive cultivation. It also discusses limitations of Ricardo's theory and the concept of quasi-rent introduced by Marshall. The modern theory holds that rent depends on the difference between actual and transfer earnings when supply is inelastic.
The document provides information about terms of trade including:
- Terms of trade measures the price of a country's exports relative to its imports. It is calculated as the index of export prices divided by the index of import prices.
- Types of terms of trade include net barter, gross barter, income, single factorial, double factorial, real cost, and utility terms of trade. Each type has strengths and limitations in measuring trade.
- Factors influencing terms of trade include the elasticity of demand and supply for exports and imports, as well as the relative size of demand for exports and imports. Changes in terms of trade can impact standards of living, import prices, and a country's balance of payments.
This document discusses the costs of taxation in terms of deadweight loss. It explains that taxes reduce overall welfare by creating a wedge between the price paid by buyers and received by sellers. This leads to a reduction in quantity traded below the efficient market level. The deadweight loss is the loss of overall surplus, and grows as the tax increases and distorts market incentives more. Tax revenue initially rises with the tax rate but eventually falls as the tax starts to significantly reduce the size of the market. The deadweight loss from taxation depends on the price elasticities of supply and demand.
International trade theory describes how comparative advantage allows nations to gain from trade. With increasing opportunity costs, a nation's production possibility frontier becomes concave and it experiences diminishing returns in producing each additional unit of a good. This gives each nation a comparative advantage in certain goods. When nations specialize and trade according to their comparative advantages, both nations can operate on higher indifference curves, gaining more utility. Even with identical production possibilities, nations can still benefit from trade if their consumer preferences differ.
This document provides an overview of production theory and costs. It defines production as the process of converting inputs into outputs. The relationship between inputs and outputs is represented by the production function. There are laws of variable proportions that describe how average and marginal productivity change with increasing input usage in the short-run. In the long-run, returns to scale can be increasing, constant, or decreasing. The document also defines different types of costs including fixed, variable, average, and marginal costs and how they change with output levels in the short-run.
Role Of The Govt. Macro Economics Chap02Ashar Azam
Markets exist because no individual or firm produces all goods and services needed to satisfy wants and needs. A market is an arrangement that allows buyers and sellers to exchange goods and services. Governments play an important economic role in mixed market economies by promoting macroeconomic stability, addressing issues of equity and fairness, and fostering conditions for economic growth while balancing other policy objectives like environmental protection.
The law of equi-marginal utility states that a consumer will maximize total utility when the marginal utility per unit of expenditure is equal across all goods purchased. It assumes consumers have limited incomes and try to allocate spending in a way that equalizes the marginal utility of each item. An example is provided showing that total utility is maximized when $4 is spent on apples and $2 on bananas, since the marginal utility of each good is equal at that allocation. There are several limitations and assumptions of the law, and it is important in areas like production, consumption, exchange and public finance.
Macroeconomics is the study of the behavior and performance of the economy as a whole. It deals with factors that determine total output, employment, prices, and trade balances. Macroeconomics has both theoretical and policy orientations. Theoretical macroeconomics uses models to explain relationships between macroeconomic variables, while policy macroeconomics provides tools like fiscal and monetary policies to guide economic growth and stability. Macroeconomics analyzes the total economy, while microeconomics focuses on individual markets, firms, industries, and consumers. Both are interrelated, as macroeconomic theory builds on microeconomic foundations and microeconomic performance depends on the macroeconomic environment.
This document discusses the concept of utility in economics. It defines utility as the satisfaction derived from consuming a good or service. Utility is subjective and varies between individuals. The document outlines two approaches to utility - the cardinal approach which views utility as measurable, and the ordinal approach which sees utility as only able to be compared. It also discusses total utility, marginal utility, diminishing marginal utility, and indifference curves in analyzing utility.
The document discusses demand functions and different types of demand. It defines individual and market demand functions. Individual demand function shows how demand for a commodity relates to its price, income of the consumer, tastes and other factors. Market demand function adds population size and income distribution as additional factors. The document also outlines seven types of demand: direct vs derived, domestic vs industrial, autonomous vs induced, perishable vs durable goods, new vs replacement, final vs intermediate, and individual vs market demands.
Monetary policy involves central banks using interest rates and money supply to influence economic activity and inflation. The Bank of England pursues monetary policy to meet a 2% inflation target. It uses tools like interest rates, quantitative easing, and forward guidance. Low rates since 2009 have aimed to boost growth but can hurt savers and cause housing booms. The effectiveness of monetary policy faces challenges like debt levels and confidence. There are debates around the costs and benefits of current low rates in the UK.
This document provides an overview of imperfect competition. It discusses the key characteristics of monopolistic competition, oligopoly, and monopoly market structures. For each structure, it outlines the number of firms, ability to affect price, entry barriers, and examples. The document then examines pricing decisions under imperfect competition and provides examples of the De Beers cartel, which dominated the global diamond industry through controlling supply. In summary, the document analyzes different forms of imperfect competition and pricing models.
This document provides an overview of tariffs as an instrument of trade policy. It discusses:
1) The objectives of understanding tariffs and their effects on trade patterns, welfare, and income distribution.
2) Models used to analyze the effects of tariffs, including partial equilibrium models and examining small vs. large country cases.
3) How tariffs affect prices, consumption, production, trade balances, and welfare in importing and exporting countries through a shift in supply and demand curves. Tariffs create costs through deadweight losses.
4) Concepts of consumer surplus, producer surplus, and total surplus are used to measure and compare the costs and benefits of tariffs, free trade, and autark
This document discusses 7 principles of economics:
1. People face trade-offs when making decisions that require giving up one desirable option for another.
2. The cost of something is measured by what is given up to obtain it, known as opportunity cost.
3. Rational people make decisions at the margin by comparing small incremental changes in costs and benefits.
4. People respond to incentives of rewards and punishments that induce behavior.
5. Trade between countries can make all countries better off by allowing specialization and access to more goods.
6. Markets are usually a good way to organize economic activity through the "invisible hand" of supply and demand.
7. Governments can sometimes improve market
People face tradeoffs when making decisions and consider marginal costs and benefits. Trade benefits all parties by allowing specialization. Markets generally coordinate economic activity well, though governments can address market failures. A country's standard of living depends on productivity, and inflation rises with excess money printing. Society faces a short-term tradeoff between inflation and unemployment.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
The Solow-Swan model assumes constant returns to scale in production using capital and labor. It predicts an economy will reach a steady state equilibrium where the savings rate equals the investment needed to maintain the capital-labor ratio. The key assumptions include diminishing returns to individual inputs, exogenous population growth and technological progress, and savings being a constant fraction of income. The model shows how an economy converges over time to this steady state level of capital per worker and output per worker, regardless of its starting point.
This document discusses the concepts of demand, demand function, demand curve, individual demand, market demand, factors that affect demand, and exceptions to the law of demand. It defines key terms like quantity demanded, demand schedule, utility, and explains the inverse relationship between price and quantity demanded as reflected in the downward sloping demand curve under the law of demand. The document also discusses causes of change in demand and how they result in a shift of the demand curve, as well as features of demand for durable goods and derived demand.
This document discusses Gossen's Second Law, also known as the Law of Equi-marginal Utility. The law states that consumers will allocate their limited income across different goods in a way that equalizes the marginal utility per rupee spent. Traditionally, this meant spending to the point where the last rupee spent on each good yields equal satisfaction. Modernly, it means allocating spending such that the marginal utility divided by price is equal for all goods. The law aims to explain how consumers can maximize total utility from a given expenditure.
This document summarizes key aspects of monopolistic competition. It describes monopolistic competition as having many firms selling differentiated but similar products, with free entry and exit in the long run. In the short run, monopolistically competitive firms profit maximize at a quantity where price exceeds average total cost. In the long run, these firms operate at a loss and produce at a quantity where price equals average total cost, resulting in excess capacity compared to perfect competition. The document also discusses how advertising and brand names contribute to product differentiation in monopolistic competition.
This document provides an overview of international trade and development. It discusses the static and dynamic gains from foreign trade, as well as the Prebisch-Singer-Myrdal thesis on the long-term deterioration of terms of trade for developing countries. The document also examines inward-looking and outward-looking trade strategies, dual-gap analysis, and factors that affect a country's terms of trade such as differing elasticities of demand, unequal market power, technical change, and multinational corporations. Overall, the document analyzes how international trade impacts economic growth and development.
The document discusses theories of economic rent, including Ricardo's theory that rent is payment for the original qualities of land. It also discusses modern theories that rent can apply to all factors with inelastic supply. Rent is defined as any payment above the minimum needed to keep a factor in production. The document provides examples of rent on land and discusses assumptions of Ricardian theory like diminishing returns under intensive cultivation. It also discusses limitations of Ricardo's theory and the concept of quasi-rent introduced by Marshall. The modern theory holds that rent depends on the difference between actual and transfer earnings when supply is inelastic.
The document provides information about terms of trade including:
- Terms of trade measures the price of a country's exports relative to its imports. It is calculated as the index of export prices divided by the index of import prices.
- Types of terms of trade include net barter, gross barter, income, single factorial, double factorial, real cost, and utility terms of trade. Each type has strengths and limitations in measuring trade.
- Factors influencing terms of trade include the elasticity of demand and supply for exports and imports, as well as the relative size of demand for exports and imports. Changes in terms of trade can impact standards of living, import prices, and a country's balance of payments.
This document discusses the costs of taxation in terms of deadweight loss. It explains that taxes reduce overall welfare by creating a wedge between the price paid by buyers and received by sellers. This leads to a reduction in quantity traded below the efficient market level. The deadweight loss is the loss of overall surplus, and grows as the tax increases and distorts market incentives more. Tax revenue initially rises with the tax rate but eventually falls as the tax starts to significantly reduce the size of the market. The deadweight loss from taxation depends on the price elasticities of supply and demand.
International trade theory describes how comparative advantage allows nations to gain from trade. With increasing opportunity costs, a nation's production possibility frontier becomes concave and it experiences diminishing returns in producing each additional unit of a good. This gives each nation a comparative advantage in certain goods. When nations specialize and trade according to their comparative advantages, both nations can operate on higher indifference curves, gaining more utility. Even with identical production possibilities, nations can still benefit from trade if their consumer preferences differ.
This document provides an overview of production theory and costs. It defines production as the process of converting inputs into outputs. The relationship between inputs and outputs is represented by the production function. There are laws of variable proportions that describe how average and marginal productivity change with increasing input usage in the short-run. In the long-run, returns to scale can be increasing, constant, or decreasing. The document also defines different types of costs including fixed, variable, average, and marginal costs and how they change with output levels in the short-run.
Role Of The Govt. Macro Economics Chap02Ashar Azam
Markets exist because no individual or firm produces all goods and services needed to satisfy wants and needs. A market is an arrangement that allows buyers and sellers to exchange goods and services. Governments play an important economic role in mixed market economies by promoting macroeconomic stability, addressing issues of equity and fairness, and fostering conditions for economic growth while balancing other policy objectives like environmental protection.
The law of equi-marginal utility states that a consumer will maximize total utility when the marginal utility per unit of expenditure is equal across all goods purchased. It assumes consumers have limited incomes and try to allocate spending in a way that equalizes the marginal utility of each item. An example is provided showing that total utility is maximized when $4 is spent on apples and $2 on bananas, since the marginal utility of each good is equal at that allocation. There are several limitations and assumptions of the law, and it is important in areas like production, consumption, exchange and public finance.
Macroeconomics is the study of the behavior and performance of the economy as a whole. It deals with factors that determine total output, employment, prices, and trade balances. Macroeconomics has both theoretical and policy orientations. Theoretical macroeconomics uses models to explain relationships between macroeconomic variables, while policy macroeconomics provides tools like fiscal and monetary policies to guide economic growth and stability. Macroeconomics analyzes the total economy, while microeconomics focuses on individual markets, firms, industries, and consumers. Both are interrelated, as macroeconomic theory builds on microeconomic foundations and microeconomic performance depends on the macroeconomic environment.
This document discusses the concept of utility in economics. It defines utility as the satisfaction derived from consuming a good or service. Utility is subjective and varies between individuals. The document outlines two approaches to utility - the cardinal approach which views utility as measurable, and the ordinal approach which sees utility as only able to be compared. It also discusses total utility, marginal utility, diminishing marginal utility, and indifference curves in analyzing utility.
The document discusses demand functions and different types of demand. It defines individual and market demand functions. Individual demand function shows how demand for a commodity relates to its price, income of the consumer, tastes and other factors. Market demand function adds population size and income distribution as additional factors. The document also outlines seven types of demand: direct vs derived, domestic vs industrial, autonomous vs induced, perishable vs durable goods, new vs replacement, final vs intermediate, and individual vs market demands.
Monetary policy involves central banks using interest rates and money supply to influence economic activity and inflation. The Bank of England pursues monetary policy to meet a 2% inflation target. It uses tools like interest rates, quantitative easing, and forward guidance. Low rates since 2009 have aimed to boost growth but can hurt savers and cause housing booms. The effectiveness of monetary policy faces challenges like debt levels and confidence. There are debates around the costs and benefits of current low rates in the UK.
This document provides an overview of imperfect competition. It discusses the key characteristics of monopolistic competition, oligopoly, and monopoly market structures. For each structure, it outlines the number of firms, ability to affect price, entry barriers, and examples. The document then examines pricing decisions under imperfect competition and provides examples of the De Beers cartel, which dominated the global diamond industry through controlling supply. In summary, the document analyzes different forms of imperfect competition and pricing models.
This document provides an overview of tariffs as an instrument of trade policy. It discusses:
1) The objectives of understanding tariffs and their effects on trade patterns, welfare, and income distribution.
2) Models used to analyze the effects of tariffs, including partial equilibrium models and examining small vs. large country cases.
3) How tariffs affect prices, consumption, production, trade balances, and welfare in importing and exporting countries through a shift in supply and demand curves. Tariffs create costs through deadweight losses.
4) Concepts of consumer surplus, producer surplus, and total surplus are used to measure and compare the costs and benefits of tariffs, free trade, and autark
This document discusses 7 principles of economics:
1. People face trade-offs when making decisions that require giving up one desirable option for another.
2. The cost of something is measured by what is given up to obtain it, known as opportunity cost.
3. Rational people make decisions at the margin by comparing small incremental changes in costs and benefits.
4. People respond to incentives of rewards and punishments that induce behavior.
5. Trade between countries can make all countries better off by allowing specialization and access to more goods.
6. Markets are usually a good way to organize economic activity through the "invisible hand" of supply and demand.
7. Governments can sometimes improve market
People face tradeoffs when making decisions and consider marginal costs and benefits. Trade benefits all parties by allowing specialization. Markets generally coordinate economic activity well, though governments can address market failures. A country's standard of living depends on productivity, and inflation rises with excess money printing. Society faces a short-term tradeoff between inflation and unemployment.
The document outlines 10 principles of economics: 1) People face tradeoffs when making decisions; 2) The cost of something is what you give up to get it; 3) Rational people think at the margin by comparing marginal costs and benefits; 4) People respond to incentives. Trade can make everyone better off and markets are generally a good way to organize economic activity, though governments can improve outcomes during market failures. A country's productivity determines its standard of living. Inflation results from too much money printing by the government, and there is a short-run tradeoff between inflation and unemployment.
It is a presentation of about Economics and its principles.This ppt will teach you economics from basic level to advanced level. Studying economics helps us to compare our country economy to different countries in the world.
This chapter introduces the key principles of economics. It discusses that economics addresses how societies manage scarce resources through decisions made by individuals and firms. The chapter outlines the principles of how people make decisions, how people interact through markets and trade, and how the overall economy functions. The principles covered are: people face tradeoffs; opportunity cost is the relevant cost; rational people think at the margin; people respond to incentives; trade can make all parties better off; markets are generally efficient but governments can address market failures; productivity drives living standards; inflation is caused by too much money printing; and societies face a short-run tradeoff between inflation and unemployment.
This chapter introduces some of the key principles of economics. It discusses that economics addresses questions about how societies manage scarce resources. It explores four main principles: how people make decisions, how people interact, how markets usually provide a good way to organize economic activity, and how governments can sometimes improve market outcomes. The chapter provides examples and discussion of opportunity costs, incentives, trade, and the role of prices in allocating resources. It also addresses how a country's standard of living depends on its ability to produce goods and services.
The document outlines 10 fundamental principles of economics divided into 3 categories: how people make decisions, how people interact, and how the economy as a whole works. It describes each principle in 1-2 paragraphs. The principles of how people make decisions are that people face tradeoffs, opportunity costs are what is given up, people think at the margin, and respond to incentives. The principles of how people interact are that trade can make all parties better off, markets are generally efficient but government can improve outcomes. The principles of how the economy works are that standard of living depends on productivity, inflation occurs when money supply grows too quickly, and there is a short-run tradeoff between inflation and unemployment.
The document outlines 10 principles of economics across 3 categories - how people make decisions, how people interact, and how the economy as a whole works. The key principles are that people face tradeoffs, respond rationally to incentives, can benefit from specialization and trade, and markets are generally effective but sometimes require government intervention to address externalities or market failures. Productivity is the ultimate source of living standards, inflation is ultimately caused by excessive money growth, and there is a short-run tradeoff between inflation and unemployment.
This document outlines 10 principles of economics according to an economics textbook. It discusses how individuals and societies face tradeoffs in managing scarce resources, and how rational decision making involves weighing costs and benefits at the margin. Markets are generally effective at organizing economic activity, but governments sometimes need to intervene to address market failures or inequities. A nation's standard of living ultimately depends on its productivity, and excess money creation by the government can lead to inflation, which trades off against unemployment in the short run according to the Phillips curve.
This document introduces the ten principles of economics according to Gregory Mankiw's economics textbook. It explains that economics studies how societies manage scarce resources and that individuals and societies face tradeoffs in their decision making. It discusses how rational people consider costs and benefits at the margin when making choices and how incentives influence behavior. Trade, markets, and government intervention are reviewed as mechanisms for organizing economic activity. Productivity, money supply, and inflation are linked to standards of living and unemployment rates.
This document introduces the ten principles of economics according to Gregory Mankiw's economics textbook. It explains that economics studies how societies manage scarce resources and that individuals and societies face tradeoffs in making decisions. It discusses how rational people consider costs and benefits at the margin when deciding how to allocate resources. Markets are generally efficient but governments sometimes need to intervene to correct market failures or inequities. A nation's standard of living depends on its productivity, and inflation is often caused by increases in the money supply.
This document outlines ten principles of economics from an economics textbook. It discusses the principles in three categories: how people make decisions, how people interact, and how the overall economy works. Some of the key principles covered are that people face tradeoffs, the cost of something is what you give up to get it, markets are generally a good way to organize economic activity, and a country's standard of living depends on its productivity.
This document summarizes 10 principles of economics from a lecture presentation. It discusses how individuals and societies face tradeoffs in decision making due to scarce resources. Markets are generally efficient at coordinating trade but sometimes fail, allowing for potential government intervention. A country's production determines living standards, and inflation and unemployment are related in the short-run by the Phillips curve.
This document provides an overview of 10 principles of economics according to N. Gregory Mankiw's textbook. It discusses that individuals face tradeoffs when making decisions and consider costs and benefits at the margin. Trade between individuals can make all parties better off, and markets are generally efficient at coordinating trade, though governments may intervene to address market failures. A country's production level determines its standard of living, and in the short-run there is a tradeoff between inflation and unemployment.
This document provides an overview of 10 principles of economics according to N. Gregory Mankiw's textbook. It discusses that individuals face tradeoffs when making decisions and consider costs and benefits at the margin. Trade between individuals can make all parties better off, and markets are generally efficient at coordinating economic activity, though governments may intervene to address market failures. A country's production level determines its standard of living, and in the short-run there is a tradeoff between inflation and unemployment.
This document provides an introduction to economics. It defines economics as the study of how individuals and societies make decisions about using scarce resources to fulfill wants and needs. It then discusses microeconomics, which examines individual economic decisions, and macroeconomics, which examines the overall economy. The document outlines the key economic questions of what, how much, how, for whom, and who decides production. It also summarizes Adam Smith's concept of the invisible hand and the principles of scarcity, opportunity cost, and incentives.
This document summarizes 10 key principles of economics from a textbook. It discusses principles related to how individuals make decisions, how people interact in markets, and how the overall economy works. The principles include: people face tradeoffs; costs are what you give up; rational people think at the margin; people respond to incentives; trade can make all parties better off; markets are usually a good way to organize activity; governments can improve market outcomes; a country's standard of living depends on productivity; and inflation reduces purchasing power over time. The document uses examples and diagrams to explain each principle in 2-4 paragraphs.
This document defines economics and distinguishes between microeconomics and macroeconomics. It explains that economics studies how individuals, businesses, governments and societies cope with scarcity. It also discusses the two main economic questions of what, how, and for whom goods and services are produced. Additionally, it covers key ideas in economics like incentives, tradeoffs, and opportunity cost.
Similar to Lecture one 10 principles of economics (20)
we are going to see the importance of risk communication and community engagement in fighting against covid-19 and also describe some challenges we are still facing nowadays
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THE INFLUENCE OF MOBILE BANKING SERVICES ON CUSTOMER SATISFACTIONNzabirinda Etienne
This document discusses a study on the influence of mobile banking services on customer satisfaction. It provides background on the shift from traditional to digital banking and the growth of mobile banking. The study aims to analyze customer perceptions of mobile banking services and satisfaction at a bank in Rwanda. A literature review covers concepts of mobile banking services and customer satisfaction. The methodology included a survey of 61 bank customers to assess flexibility, credibility, accessibility, privacy and customer loyalty, commitment, trust and retention. The results showed positive customer perceptions of mobile banking services and satisfaction. A relationship was found between mobile banking services and customer satisfaction.
To develop the candidate understands and ability to apply, analyzes, and interprets the fundamental principles of economics in relation to the business environment both in the domestic and global economies.
IMPACT OF TAX REVENUE ON ECONOMIC GROWTH IN RWANDA FROM 2007-2017.Nzabirinda Etienne
Rwanda is working tirelessly to achieve economic growth and development. Taxation effective is the one tool to promote and to accelerate economic growth and development, several studies analyses the impact of tax on economic growth and economic development.
The objective of this study is to investigate the impact of tax revenue on economic growth in Rwanda from 2007-2017. Secondary data were sourced from Rwanda Revenue Authority (RRA) and National Institute of statistics of Rwanda (NISR) for the period spanning from 2007Q1-2017Q4. Descriptive data analysis was used and the variable considered here are: Gross domestic product (GDP) as proxy for economic growth, direct tax (DT), Tax on goods and services (TGS) and Tax on international trade and transaction (TITT). Significant literature review for this study is available.
The results of the unit root and the co-integration tests revealed that all variables are integrated of order one, I(1) and Johensen cointegration test indicate existence of a long-run equilibrium relationship among variables included in the model and we use also Vector Error Correction Model (VECM) estimation method for data analysis to estimate for short run result. The empirical findings showed that direct tax(DT)and tax on goods and services(TGS) variables have positive at 0.1631 to 0.60 31 respectively impact on economic growth, while Tax on international trade and transactions(TITT) variable has negative at -0.005913 and it impacts on economic growth.
This study recommends that the policymakers within government of Rwanda must improve both direct tax and tax on goods and services (domestic tax) and increase Taxes on international trade transactions (customs duties), it will harm economic growth of Rwanda therefore custom duties must be rationally reduced or abolished and free trade zones like Africa continental free trade area (AfCFTA) must create to foster increased exchange of goods and services across borders.
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GENERAL OBJECTIVE
At the end of this session, the learner will be able to:
-understand the meaning of happiness economics
-Analyze and judge the economic factors and non economic that affect happiness in real world
-Understand how rising GDP may not increase happiness
-understand the qualitative measurement of happiness
OBJECTIF GENERALE POUR LA PREMIÈRE PÉRIODE
-Compétences de communication en français
-Rôle de savoir compétences de communication en français
-Épellation d’alphabet de a à z
-Comment introduire mon soi devant l'audience
-Dialogue
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LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
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core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
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advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
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more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
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'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
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Accurate understanding of land use and cover is imperative for the development planning
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changes, conversion trends, and other related patterns. The spatial dimensions of land use and
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help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
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2. GENERAL OBJECTIVE
Up on completion of this first module unit, learners will be able to:
-Understand the meaning of economics
-Analyze how people make decision .
1.People face tradeoffs.
2.The cost of something is what you give up to get it.
3.Rational people think at the margin.
4.People respond to incentives.
-Judge how people interact with each other.
5.Trade can make everyone better off.
6.Markets are usually a good way to organize economic activity.
7.Governments can sometimes improve economic outcomes
-Conceptualize the forces and trends that affect how the economy as a
whole works.
8.The standard of living depends on a country’s production.
9.Prices rise when the government prints too much money.
10.Society faces a short-run tradeoff between inflation and
unemployment d how
PRINICPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
3. MEANING OF ECONOMICS
The word economy comes from a Greek word for “one who manages a
household.”
A household faces many decisions. It must decide which members of the
household do which tasks and what each member gets in return: Who
cooks dinner? Who does the laundry? Who gets to choose what TV show
to watch?
Like a household, a society faces many decisions. A society must decide
what jobs will be done and who will do them. It needs some people to
grow food, other people to make clothing, and still others to design
computer software.
The management of society’s resources is important because resources
are scarce..
Scarcity means that society has limited resources and therefore cannot
produce all the goods and services people wish to have. Just as a
household cannot give every member everything he or she wants, a
society cannot give every individual the highest standard of living to
which he or she might aspire.
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
4. CONTINUE
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
Economics is social science that analyses the best way to
allocate scarce resources in order to satisfy the human wants
and needs.
We can go further to state that:
economics is about the study of scarcity and choice
economics finds ways of reconciling unlimited wants with
limited resources
economics explains the problems of living in communities in
terms of the underlying resource costs and consumer
benefits
economics is about the co-ordination of activities which
result from specialization
Economics is the study of how society manages its scarce
resources.
5. CONTINUE
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
Economists therefore study how people make decisions: how much
they work, what they buy, how much they save, and how they invest
their savings.
Economists also study how people interact with one another. For
instance, they examine how the multitude of buyers and sellers of a good
together determine the price at which the good is sold and the quantity
that is sold.
Finally, economists analyze forces and trends that affect the economy
as a whole, including the growth in average income, the fraction of the
population that cannot find work, and the rate at which prices are rising.
6. 10 PRINCIPLES OF ECONOMICS
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
A.HOW PEOPLE MAKE DECISION
An economy is just a group of people interacting with one another as
they go about their lives.Because the behavior of an economy reflects
the behavior of the individuals who make up the economy, we start our
study of economics with four principles of individual decision making.
PRINCILPLE ONE: PEOPLE FACE TRADEOFFS
To get one thing that we like, we usually have to give up another thing that
we like. Making decisions requires trading off one goal against another.
Consider a student who must decide how to allocate her most valuable
resource, let say her time. She can spend all of her time studying
economics; she can spend all of her time studying front office ; or she can
divide her time between the two fields. For every hour she studies one
subject, she gives up an hour she could have used studying the other. And
for every hour she spends studying, she gives up an hour that she could
have spent napping, bike riding, watching TV, or working at her part-time
job for some extra spending money.
7. CONTINUE
Or consider parents deciding how to spend their family income. They
can buy food, clothing, Or they can save some of the family income for
retirement or the children’s college education.
The classic tradeoff is between “guns and butter.” The more we spend on
national defense to protect our shores from foreign aggressors (guns), the
less we can spend on consumer goods to raise our standard of living at
home (butter).
Others examples of tradeoff: Food v. clothing ,Leisure time v. work,
Efficiency v. equity
Efficiency v. Equity
◦ Efficiency means society gets the most that it can from its scarce
resources.
◦ Equity means the benefits of those resources are distributed fairly
among the members of society.
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
8. PRINCIPLE TWO: THE COST OF SOMETHING IS WHAT YOU
GIVE UP TO GET IT
PRINCIPLEOF ECONOMICS Par MSC Etienne NZA Tel:0786933786
Because people face tradeoffs, making decisions requires
comparing the costs and benefits of alternative courses of action. In
many cases, however, the cost of some action is not as obvious as it
might first appear. Consider, for example, the decision whether to
go to college. The benefit is intellectual enrichment and a lifetime of
better job opportunities. But what is the cost?
To answer this question, you might be tempted to add up the money
you spend on tuition, books, room, and board. Yet this total does not
truly represent what you give up to spend a year in college. When
you spend a year listening to lectures, reading textbooks, and
writing papers, you cannot spend that time working at a job. For
most students, the wages given up to attend school are the largest
single cost of their education.
The opportunity cost of an item is what you give up to get that item.
When making any decision, such as whether to attend college,
decision makers should be aware of the opportunity costs that
accompany each possible action.
9. PRIINCIPLEOF ECONOMICS Par MSC Etienne NZA Tel:0786933786
Decisions in life are rarely black and white but usually involve
shades of gray. When it’s time for dinner, the decision you face is
not between fasting or eating When exams roll around, your
decision is not between blowing them off or studying 24 hours a
day, but whether to spend an extra hour reviewing your notes
instead of watching TV. Economists use the term marginal changes
to describe small incremental adjustments to an existing plan of
action. Keep in mind that “margin” means “edge,” so marginal
changes are adjustments around the edges of what you are doing.
In many situations, people make the best decisions by thinking at
the margin. By comparing these marginal benefits and marginal
costs, individuals and firms can make better decisions by thinking at
the margin. A rational decision maker takes an action if and only if
the marginal benefit of the action exceeds the marginal cost.
PRINCIPLE THREE: RATIONAL PEOPLE
THINK AT THE MARGIN
10. PRINCIPLE #4: PEOPLE RESPOND TO
INCENTIVES
Because people make decisions by comparing costs and benefits, their
behavior may change when the costs or benefits change. That is, people
respond to incentives. When the price of an apple rises, for instance,
people decide to eat more pears and fewer apples, because the cost of
buying an apple is higher. At the same time, apple orchards decide to hire
more workers and harvest more apples, because the benefit of selling an
apple is also higher. As we will see, the effect of price on the behavior of
buyers and sellers in a market
Note That:
Marginal changes in costs or benefits motivate people to respond.
The decision to choose one alternative over another occurs when that
alternative’s marginal benefits exceed its marginal costs!
PRINCIPLE OF ECONOMICS Par MSC Etienne NZA Tel:0786933786
11. B.HOW PEOPLE INTERACT
The first four principles discussed how individuals make decisions.
As we go about our lives, many of our decisions affect not only
ourselves but other people as well. The next three principles concern
how people interact with one another
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Français facilement Par MSC Etienne
NZA Tel:0786933786
PRINCIPLE FIVE: TRADE CAN MAKE EVERYONE BETTER OFF
Trade between two countries can make each country better off. Trade allows
each person to specialize in the activities he or she does best,By trading with
others, people can buy a greater variety of goods and services at lower cost.
Countries as well as families benefit from the ability to trade with one
another. Trade allows countries to specialize in what they do best and to
enjoy a greater variety
of goods and services.
12. PRINCIPLE #6: MARKETS ARE USUALLY A GOOD WAY TO
ORGANIZE ECONOMIC ACTIVITY
The collapse of communism in the Soviet Union and Eastern
Europe may be the most important change in the world during the
past half century. Communist countries worked on the premise that
central planners in the government were in the best position to guide
economic activity. These planners decided what goods and services
were produced, how much was produced, and who produced and
consumed these goods and services. The theory behind central
planning was that only the government could organize economic
activity in a way that promoted
economic well-being for the country as a whole. Today, most
countries that once had centrally planned economies have
abandoned this system and are trying to develop market economies.
In a market economy, the decisions of a central planner are replaced
by the decisions of millions of firms and households. Firms decide
whom to hire and what to make. Households decide which firms to
work for and what to buy with their incomes. These firms and
households interact in the marketplace, where prices and self-
interest guide their decisions.
Principles of economics Par MSC Etienne NZA Tel:0786933786
13. PRINCIPLE #7: GOVERNMENTS CAN SOMETIMES IMPROVE
MARKET OUTCOMES
Although markets are usually a good way to organize economic
activity, this rule has some important exceptions. There are two
broad reasons for a government to intervene in the economy: to
promote efficiency and to promote equity. That is, most policies aim
either to enlarge the economic pie or to change how the pie is
divided.
The invisible hand usually leads markets to allocate resources
efficiently. Nonetheless, for various reasons, the invisible hand
sometimes does not work.
Economists use the term market failure to refer to a situation in
which the market on its own fails to allocate resources efficiently.
One possible cause of market failure is an externality. An externality
is the impact of one person’s actions on the well-being of a
bystander. The classic example of an external cost is pollution.
Principle of economics Par MSC Etienne NZA Tel:0786933786
14. C.HOW ECONOMYAS WHOLE WORKS
We started by discussing how individuals make decisions and then
looked at how people interact with one another. All these decisions and
interactions together make up “the economy.” The last three principles
concern the workings of the economy as a whole
PRINCIPLE #8: A COUNTRY’S STANDARD OF LIVING
DEPENDS ON ITS ABILITY TO PRODUCE GOODS AND
SERVICES
Standard of living may be measured in different ways:
◦ By comparing personal incomes.
◦ By comparing the total market value of a nation’s production.
Priciple of economics Par MSC Etienne NZA Tel:0786933786
15. PRINCIPLE #9: PRICES RISE WHEN THE GOVERNMENT
PRINTS TOO MUCH MONEY
In Germany in January 1921, a daily newspaper cost 0.30 marks.
Less than two years later, in November 1922, the same newspaper
cost 70,000,000 marks. All other prices in the economy rose by
similar amounts. This episode is one of history’s most spectacular
examples of inflation, an increase in the overall level of prices in the
economy
Note this
Inflation is an increase in the overall level of prices in the economy.
One cause of inflation is the growth in the quantity of money.
When the government creates large quantities of money, the value
of the money falls.
Principle of economics Par MSC Etienne NZA Tel:0786933786
16. PRINCIPLE #10: SOCIETY FACES A SHORT-RUN TRADEOFF
BETWEEN INFLATION AND UNEMPLOYMENT
If inflation is so easy to explain, why do policymakers sometimes
have trouble ridding the economy of it? One reason is that reducing
inflation is often thought to cause a temporary rise in
unemployment. The curve that illustrates this tradeoff between
inflation and unemployment is called the Phillips curve, after the
economist who first examined this relationship.
Inflation Unemployment
It’s a short-run tradeoff!
Priciples of economics Par MSC Etienne NZA Tel:0786933786
17. QUICK QUESTION:
Q1.In one paragraph, Use your own words, write concept note on
the meaning of economics and why it is extremely important for
you.
Q2.List and briefly explain the ten principles of economics.
PRINCIPLE OF ECON0MICS Par MSC Etienne NZA Tel:0786933786
18. THANK YOU FOR YOUR
ATTENTION !
Compétences de communication en
Français facilement Par MSC Etienne
NZA Tel:0786933786