Minggu 1

Pengantar Ekonomi
Slides prepared by
Chandra Utama
The example the Mathematicians who winning of Nobel Prize in economics

John Forbes Nash Jr., or just John Nash, was considered by many a mathematical
genius. John received a Nobel Prize for his scientific input in our everyday life in 1994.
Born on June 13th, 1928, John focused his studies on the Game Theory and the Nash
Solution. He was recognized for his contribution in economics, getting a Nobel Prize in
Economics awarded in 1969. John’s work aimed to shed light on factors governing
chance and decision-making, threat and reaction in our everyday life. This brilliant mind
made critical contributions to differential geometry, partial differential equations, and
game theory.

Clive Granger – full name Sir Clive William John Granger – was a
famous British mathematician whose studies focused on non-
linear time series. He taught at the University of Nottingham
(Britain), and at the University of California (San Diego, US). His
award was in 2003, with his Prize Lecture taking place that year
on December 8th. His landmark contribution in time series
analysis, focusing on related areas including co-integration and
applications earned him this prestigious recognition.
Rencana Perkuliahan
Buku Referensi
Referensi sumber data
Minggu Materi
1 Utility & Choice
2 Demand
3 Production
4 Cost and supply
5 Profit maximization
6 Perfect competition in a single market
7 Imperfect competition (monopoly, monopolistic competition, and oligopoly)
8 National income
9 Cost of living
10 Business cycle
11 Introduction to financial market
12 Introduction to international market and international financial market
13 Introduction macroeconomic model
14 Fiscal policy and monetary policy
What is Economics
(Ekonomika)?
Economics: The study of the allocation of scarce resources among alternative uses.
What is Microeconomics? The study of the economic choices individuals and firms make and of how these
choices create markets.

Macroeconomics studies how an overall economy—the market systems that operate on a large scale—
behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate
of economic growth, national income, gross domestic product (GDP), and changes in unemployment.
ECONOMIC MODELS
 Manusia

Model

Kita bisa mempelajari manusia

• Sebagai suatu sistem

keseluruhan
• Dari fungsi setiap organ

Ada teori yang mendasari

Mempelajari perekonomian
Model
• Ekonomika Makro
Makroekonomika
Perekonomian
• Ekonomika Mikro
Mikroekonomika
Ada dasar teori
WHAT IS Theory and Models?
● Theory definition: A theory is a formal idea or set of ideas that is intended to
explain something.

● Models: Simple theoretical descriptions that capture the essentials of how the
economy works.

● Economists use models to describe economic activities

Economics Model
In economics, a model is a theoretical construct representing
economic processes by a set of variables and a set of logical and/or quantitative
relationships between them. The economic model is a simplified,
often mathematical, framework designed to illustrate complex processes.
Frequently, economic models posit structural parameters. A model may have
various exogenous variables, and those variables may change to create various
responses by economic variables. Methodological uses of models include
investigation, theorizing, and fitting theories to the world.
Verification of Economic Models
● There are two general methods used to verify economic
models:
○ direct approach
■ establishes the validity of the model’s assumptions
○ indirect approach
■ shows that the model correctly predicts real-world
events
Features of Economic Models
● Ceteris Paribus assumption:
Ceteris Paribus means “other things the same”. Economic models attempt to
explain simple relationships
○ focus on the effects of only a few forces at a time
○ other variables are assumed to be unchanged during the period of study
● Optimization assumption:
Many economic models begin with the assumption that economic actors are
rationally pursuing some goal
○ consumers seek to maximize their utility
○ firms seek to maximize profits (or minimize costs)
○ government regulators seek to maximize public welfare
● Distinction between positive and normative analysis
Positive economic theories seek to explain the economic phenomena that is
observed. Normative economic theories focus on what “should” be done
The Economic Theory of Value
The publication of Adam Smith’s The Wealth of Nations is considered the beginning of modern economics.
Distinguishing between “value” and “price” continued (illustrated by the diamond-water paradox)
■ the value of an item meant its “value in use”
■ the price of an item meant its “value in exchange”
■ Labor Theory of Exchange Value: the exchange values of goods are determined by what it costs to
produce them these costs of production were primarily affected by labor costs therefore, the
exchange values of goods were determined by the quantities of labor used to produce them
producing diamonds requires more labor than producing water
■ The Marginalist Revolution
The exchange value of an item is not determined by the total usefulness of the item, but rather the
usefulness of the last unit consumed.
because water is plentiful, consuming an additional unit has a relatively low value to individuals
The Economic Theory of Value
● Marshallian Supply-Demand Synthesis
Alfred Marshall showed that supply and demand simultaneously operate to
determine price. Prices reflect both the marginal evaluation that consumers place
on goods and the marginal costs of producing the goods

■ water has a low marginal value and a low marginal cost of production  Low price

■ diamonds have a high marginal value and a high marginal cost of production  High price
Price
Equilibrium
S
QD = Qs

P*

The demand curve has a

negative slope because
the marginal value falls as
D
quantity increases

Quantity per period

Q*
Supply-Demand Equilibrium ● A more general model is

qD = 1000 - 100p qD = a + bp
qS = -125 + 125p qS = c + dp

Equilibrium  qD = qS Equilibrium  qD = qS

1000 - 100p = -125 + 125p a + bp = c + dp

225p = 1125
p* = 5 ac
q* = 500 p* 
d b
Supply-Demand Equilibrium
A shift in demand will lead to a new equilibrium:

Q’D = 1450 - 100P

Q’D = 1450 - 100P = QS = -125 + 125P
225P = 1575
P* = 7
Q* = 750
The shift of demand
Price An increase in demand...

S
…leads to a rise in the
equilibrium price and
7 quantity.
5

D’
D

500 750 Quantity per period

 General Equilibrium Models
The Marshallian model is a partial equilibrium model, focuses only on
one market at a time

To answer more general questions, we need a model of the entire

economy.

We need to include the interrelationships between markets and

economic agents

The production possibilities frontier can be used as a basic building block

for general equilibrium models. A production possibilities frontier shows
the combinations of two outputs that can be produced with an economy’s
resources
A Production Possibility Frontier
Quantity of food
(weekly) Opportunity cost of
clothing = 1/2 pound of food

10
9.5

Opportunity cost of
4 clothing = 2 pounds of food
2

Quantity of clothing
3 4 12 13
(weekly)
 This simple model of production illustrates six principles that are common to
practically every situation studied in microeconomics:

● Resources are scarce.

● Scarcity involves opportunity costs.
● Opportunity costs are increasing.
● Incentives matter.
● Inefficiency involves real costs.
● Whether markets work well is important.
Model keseimbangan umum lebih kompleks
Thank You
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