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    Rev. Elharam

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    8 views10 pages

    Rev. Elharam

    Uploaded by

    Hossam Gomaa Ali
    Rev. Elharam

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 10
    Economics 2023 Economics: is the study of how societies use scarce resources to produce valuable commodities and distribute them among different peaple to fulfill peoples needs and wants, Behind this definition there are key ideas in economics. Searce resources Producing ——-Fullfilling needs & wants, -Efficlency “Not rare “Poor or Rich can have them for free “Rare “you have to pay to get them “not for free ” Needs: A good or service which is necessary for living, (Limited somehow) Wants: A good or service whieh one would like to have, but not essential for living: (Unlimited) Microeconomics: The branch of economics which is concemed with the behavior of individual entities such as markets, firms, and households ‘Macroeconomics: The branch of econamics which is concerned with the overall performange of the economy Factors of production:- A-Land: All natural resources as land, water 24abor: Man power; the human ti 3-capital: Goods praduced in order to produce other goods; as machines, buildy 4-Enterprise: Management skis and ability to take a risk Economic problem: All resources are relatively scarce. We have to choose from alternatives. All people and societies s Opportunity cost: In a world af scarcity, choosing one thing means gi The oppartunity cast of a decision: is” the value of the good of Bry Types of economic system: ‘-market economy: 's one in which individuals and private: consumption. Free Market Capitals 2-command econamy: is one in whi distribution . Communism Socialism 3-mixed economy: They mixed economies, Inverse Relation: |t ocour when in the value of the other number increase in the value of one variable ‘order to satisty people's wants and needs, Inot make anyone better, economically wise, without e maximurn amounts of production of a pair af goods or services that can be produced (one of them economy of a factory, given resources, assuming that all resources are fully employed, 1¢ quantity of gaod (x) praduced is measured along theharizontal axis, ‘* The quantity of good (¥) is measured along the vertical axis, ‘*Any point on the diagram indicates some amount of each kind of good produced. ‘The production-possibility Frontier (boundary) separates the attainable combinations, such as “a”, "b", and."c", from unattainable combinations, such as “a”. *Paints “a” and “b" represent efficient uses of society's resources. *Point “c” represents either an inefficient use of resources or a failure to use all the resources that are available. ‘The boundary is negatively sloped because in 3 fully employed economy more of one good can be produced only if resourees are freed by producing (allow to produce) less of other goods. ‘*Maving from point (with coordinates cO and gO )to paint b (with coordinates c1 and ga) implies producing additional amount of good (x), indicated by an.AG in the figure -Etonamie growth shifts the boundary outwards. ( to the Right side) (upward) -Some combinations of goods that were previously unattainable become attainable. -Economic deterioration shifts the boundary inwards. ( to the Left side) (downward), -Some combinations of goods that were previously attainable become unattainabl Productive efficiency occurs when an economy cannot produce more of one g Bood. Demand 1-Qd: the number of units of a goods that consumers are willin 2.8 demand schedule: is a table showing how Qd of som changes as price of that product changes, holding all o Nate: when the price increase, the quantity demanded 3-A demand curve: is a graphic r ‘Acchange in the price of a goods and curve from paint B ta G But: EX: consumers decide tl ore th demand curve shifts outword from DoDp to D:D) lifts to left from DeDoto D:D; ices rise,the demand curve shifts to right fram Deo to OD; 4-prices and availability of related goods: increases In the prices of goods that are substitutes for the goods move to demand curve to the right.And increase in the prices of goods that are complementary With the goods shifts the demand curve to the left. Supply 1-Qsithe number of units of a goods thatsellers want to sell over a specified period of time. 2-A supply schedule:is a table showing how Qs of some produict during a specified period of thme changes as the price of that product changes, holding all other determinants constant. Note: as the price of any product inereases, The Qs increase. 3- A supply eurve: is a graphic representation of relationship between Qs and price of goods. ‘Achange in the price of goods produces a movement along a fixed supply curve. But, a change in any other variable that influences Qs produces a new supply curve . Ex: if P increases from 7.00$ to 7.30S: Qs inereasesand we mave a long supply curve SoSofrom point G to C But: Ex: if one determinants of supply have changed, resulting in an entirely new supply curve SiS; 1 suppl J" L-size of industry: increase in size of industry (enter new firm) shifts supply curve to rightfram SpSp to $35: 2-Teehnological process: will shifts the supply curve to the right. }-Prices of inputs: increases in the prices of inputs the supply curve shifts to the lift from SoSp to S52 Supply and Demand Equilibrium L-shortage: ExcessQd over Qs 2-surplus: Excess QsoverQd —_3- Equilibrium; Ql: what happen to price if Demand and supply increase? Note: price will change according to the percentage of demand and supply, a+ Increase in demand by 10% and increase in supply by 20% (price 2+ Increase in demand by 10% and increase in supply by 10% (price ‘Afirm is an organization that transforms resources (inputs) int Fy producing nits in'a market economy. ‘An entrepreneur is a persan who orgapii anew idea oranew sseholds in input and output services are exchanged, and fand—used to produce products, are governments use to lssues Addressed by -What determines a nation’s long-run economic growth? What causes unemploymer hat causes a nation’s economic activity to fluctuate? What causes prices to rise? does being a part of a global economic system affect nations’ economies? -Can government policies be used to improve economic performance? Long-Run Economic Growth Rich nations have expetienced extended periods of rapid economic growth -Paor nations either have never experienced them or economic growth was offset by economic decline. Total output is increasing because of increasing population, ie. the number of available workers. Increasing average labour productivity: the amount of output produced per unit of labour input. Rates of growth of output (or output per worker) are determined by: = rates of savingand investment; -ratesof technological change; -rates of change In other factors. Business cycles: are short-run contractions and expansions of economic activity. Recession is the downward phase of a business cycle when national output is falling or growing slowly. -Hard times for many people -A major political concern Recessions are usually accompanied by high unemployment: the number of people who are available for work and are actively seeking it but cannot find jobs. Unemployed Unemployme at Rate = SPOS Labour Force -When prices of most goods and services are rising over time it is inflation. When they are falling itis deflation, -The inflation rate is the percentage increase in the average level of prices, -When the inflation rate reaches an extremely high level the economy tends to function poorly, The purchasing power of money erades quickly, which forces people to spend thelr money as soon as they receive it. “Trade surplus: exports exceed imports, “Trade deficit: imports exceed exports ‘exchange rate: the amount of Canadian dollars that can be purchased with a unit of fore Fiscal policy: government spending and taxation at different government levels. Monetary policy: the central bank's control of short-term interest rates and th ‘budget deficits: the excess of government spending over tax collection. Borrowing from the public might divert funds from more productive uses. Federal budget deficits might be linked to the decline in productivity g Elasticity is a ratio of percentages, so a change the units of me: But it is the magnitude, or absolute Demand can be inelastic, unit elastic:

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