Microeconomic

Issa
Ghnayyeb
5- Microeconomics :

① household Sector ( Demand side consumer

customer

②
private Sector
( FDI) Direct Investment
foreign .

③ mmmhhj-mseore.gl#Wl
- Good Governance =
to achene will fair -
Iii
to:-# we )
-

good governmental Sector = Band get

2,6
- Balance sheet =
-9¥
{
yet to be
desperce.fi#c.u.--A'&
( Input Revenue =
Output ۄ-646
profit / losses

spa # you
! 9 How To finance ? Budgets said
to
Income Tax
←MMgfTax→
&
CorporalTax
-

t.si

wallowing
 . dew VAT '- ↳
'

-
⇐ Idiot &

Loans = W B. = World Bank .

£w¥
I → I. ME International Monetary fund
⇐ =

clubs =

BEBB partnership with private sector .

.ms#HEsi-5yii
example : .

s.FI

⑨ GternalSedormg
↳ pit ? #
self Suficieut
-
.
so I

close d
economy
-4*-2 I -

DX *
,
external sector
Open economiymean
unemployment = ☒ Al
.

(8^1%21) , @ I 04%8-041
IN
g 14-1 @
i
* -

é→ ' Inflation
.
2641 Unemployment .

-
I'M t.ws/WHjqa
Two disease for economy --

a.
Remmifances.fm 1%3
b. To urasim .

☒ →

⑤
T.rdsectorm-hiCB.co =

Community based Organization .

- IN
⇐
* 1) :@ 2£01 #
towers
1%01 PMRC
'

-7%1 EM
PARC
Caritas
# → For F-
Hinge Gap

MENA
Region = Middle east of North Africa .

The third Sector Mena

is
huge in
region
failure
cause the
government is

household sector /Demand side / Consumer

}
7. The .
Microeconomics

2.
private sector /The production supply side /FDI - .

The Governmental Sector

)
3 .

Y . The External Sector ( Import-export) Macroeconomics

5. The Third Sector
NGO 's
/ Cpo ( community ibis "£
.

. -
•

Economy .

-
What is the Economics ?
/ Nations /people allocate
It's Science
study of how
their limited
←
economic

unlimited wants
resources

.
efficientlyto satisfy their
It's
part of
"

Social
"

human behaviour
Science
analyze
It's
study how people make choices .

* The Science Contain 8 ( science HI

every] ←
.

⑦ assumption (
②
2k¥
hypothesis
Theories 2,4J
⑧ models ↳

* assumptions for Economic 8-

Assumptions Hk finial
a.

b.
Rationality
Self-interest .
.

A- 661 Consumer *
Utility Eh ⇐ -

MII
-
•

41 producer £41
profit ✗ % -

C.
Ceterisparibus Assumption GHEE
 Assumptions For Economic As a Science . . .

••
Rationality Assumption
-The assumption that people do not intentionally make decision that
would leave them worse off

• Self interest
-

pursuit of but does not

The
-
one 's
goals ,
is
always means
increasing
One's wealth .

prestige friendship Love .

• Ceteris Paribas Assumption

factors
-

Nothing changes except the factor

studied .
or
being
Constant
"

Other
things things equal
"

-
Other
 Theories 8 Consumer choice -

Utility theoryIndifference curve .

theory :
A. Demand Theory Ñ ,
-9¥
B.
supply theory *y%&

Models 8 Simplified representations of the real world used as

the basis for predictions explanations or .

⑤ of
Scarcity
(
*
)
- Models 8
ppc production possibility curve Hijo
¥"
↳ It is amodk
Simplify the concept of scarcity
'

ECONOMIC RESOURCES ⇐ Factors of

I production . . .

1. LAND Natural gift of the

*
:
resources or the Nature .

gas (
oil Natural state)
- Under the
ground :
,
.

ground never water gas ( after extracting it)

On the : .

Above the ground

* in -

Oxygen : air . . -
.

2. PHYSICAL CAPITAL All manufactured Resources f-nfras

: ture

LABOR : The
'
*
3 .
human resources , skilled ,
un -

skilled,
semi -
skilled .

4 HUMAN CAPITAL : Accumulated and education " workers

training
-

*" 5. ENTREPRENEURSHIP person : who

organizes manages ,
.

and assembles the other resources .

- Risk taker .

Maker of basic business decision

-

policy .

In
Palestine there is no economic → it is economic
activity .
 "

ECONOMIC PROBLEMS?

Scarcity * Comparative v44 HA

to advantages
choice Desicion is
& IN
#
to absolute
Scarifice t advantages
.im economic g- si
!
.

why donations TRADE ?? Resources

qq.gg
- - - - - -

comparative
- - - -
-

advantages
:

.tn#ty-oproduceaTgoodorrenderaserviceatalower opportunity
cost scarifice Tradeoff .

-
Is
always a relative Concept .

Specialization :

different individuals
.org#d-ionaf-
and
economic
activity among
regions .

-
Leads to
greater productivity .

Comparative advantages → Specialization →

→ Higher
productivity →Trade .

depleted
renuable
.

_i
. #
( BDS
Bogart Divesments
)
to#¥
 Why donations TRADE ???

Comparative advantages → Specialization -

>
→ Higher
productivity →Trade .

S.S.si?&ISCARCItYk:*.-ni SHORTAGE *

1. There
simply arenfenougwgoodsorresourses
7.
shortage is
price determined
-
.

In the world to
satisfy all needsofwants our 2. Atthe current price ,
peoplewant to buy
for
2. At zero price there is not
,
enough everyone to more than
suppliers want to sell .

man-made choice
have all
they
want 3-
shortage is a .

3.
Scarcity always exists .
4.
suppliers are not willing to make
goods
available for this amount of money .

Jim @ 5.
shortage often go away overtime ,
there is

not much of the

p $75 & just good or resource now .

j¥ -4 $100,614
d 1h @ WE <

↳ A- Fact
.

of life $30
Wsw1-d@bi.oIihqI.b
.

.tw#*$soH.MH-2isWw
shortage # surplus ,
@↳
The three basic economic Questions "
and two

scarcity
"

of Science of
economy scarcity
Answers
opposing . . .

7. What and how much will be produced ? !

2- How will items be produced ?!
3. For whom will items be produced ? !
-
Limited Resources →
Scarcity Economic
→ problem
.
Nw@Js.I WI Economic Res JI
.-

( comparative advantages )

Efficiently ñsw✓

s.S.nl#4---1gE.mHibEffectivily=-yI---bojb--&Is-s
* =

, you
sacrifice .

Egoism →

* wants = need 64610¥

to
basic needs .

8-& 5Gt .M

purchasing power
Iot -41,1*1 j%& @ 1=6
"

to > A
•
-961 I *

•
1*15%141 ④I .br

Two form of economic systems :

Opposing answers in the

Centralized Command and Control .

-

-
price system ( market system) free market capitalist
system
-
Mixed In

- Islamic µ
-

Community .

gym pay it forward .

 ( Economic
problem)

im
scarcity
to
choice
&
-

Scarfice

Assumption 8-
① there is an two
goods
② Render Ñ%l z.IT#dsMgB
Server set
produce a
Render a ← I Produce a ↳*
service service
281 @Ñ -

Wiz -4
.

THE # it -_

II @ → got -1

↳ G- is
-

•↳
±
 How do we
represent economics ??
•
Algebra equation economics
Narrative books etc
•
essays
. . -
,
.
,

•
Graphically
>
Direct positive Relationship II
A relationship between two variables that is positive
that increase variable is associate
in one
meaning
an

with an increase in the other and a decrease in one

variable associated with a decrease in the other .

>
Inverse
Negative Relationship
%
A relationship between two variables that is negative
that an increase in one variable is assosiated
meaning
with a decrease in the other and a decrease in one
variable is assosiated with an increasein the other
.

price
too -
(
Negative /Inverse)
90 -
X

80 - Demand

70 -
✗

(positive / Direct)
how to to £ %
'
Quantity
price * is ← it;W
>

€-1 100 -

ao -

supply ✗

80 -

70 -
✗

how to to £ %
'
Quantity
EME
 PPC for the
Country .. .

1500 * Butter Trucks

jsyl ,# ① zero 1500

§Ñs② 2000 zero

Trucks 700¥ . . . . . . - . - . . . . - . . . -1*-1 Wix ③

PPC
1900 700 Sacrifice

; - DX .

c. *
; .rs#ij--EpTiE'-M '

*
i
* Inverse /
Negative Relationship .

Butter lqoo 2000

giggle -61 -

Inefficient cgi @btw efficient

economy
-

C -1£ A -1£ @
economy @
% Isis
>
54%

E
Goods Versus Economic Goods :

Goods are all from which individuals derive

-

satisfaction
things
or
happiness .

Economic
goods :
z-wiwfja.b-oqiit.si
¥-1 @ =
@
Goods .tw#sI
usability
:

⇐ 1--7 =
@
 -
0%4 KI Il JA 1
Business Fluctuations
The
the
ups and downs in business
activity throughout
economyA business
.

7.
Expansion = fluctuation in which the
pace of national
economic
activity is speeding up .

-31 to ← 6 Gi g- £6.0B I w pi z.EU =

g- ¥-1 is> it
1800

1500
(expansion)
I>

400
Contraction fluctuation 2100
2. = A business
during which the

pace of national economic activity is down

slowing .

Covid 19 § ( ← @ ' 5) § ← v. His I 2.EH I

⑨ § F- If
>
=

3. Recession = A
period of time which the rate of
during growth
of
its
business
activity
trend
consistently
is less than

long-term or is
negative
. ← ↳ A %i I -

got I > I
4. Depression = An
Extremely severe recession .

I
-

It .
Lily !
@
-

you > ↳
Determinate s Factors of Demand :

I. Factors in Quantities
causing changes Inverse
.

BQ
s-i.DK 7- price Increase -
Decrease →

II. Factors shifts Demand

causing
in .

2- Income +→ A D.
3. Tastes and preferences * .
→ DD
4.
population / Market size / buyers S D + →

5 .
The
prices of Complementary goods Inverse .
-> S D .

Two
goods are Complements when a in the
changedemand price of
One causes an
Opposite shift in the curve
for the Other
6. The
price of substitutes goods . + →
SD .

Two substitutes
goods are when
change
a in the price
of one causes a shift in demand for the other
Same direction the price
change
in the as .

7.
Expectations + → AD .

7. price . . . Increase
/ Decrease → Q / Inverse relation .

P
A
75 •
-- -- - - -

I
-

B
150 . - - - - - - - - -- •

:
☐,
÷ i
so 6:O 70
Q
 I # is
2. Income . . . . . . Increase / Decrease → DD /positive
price
increase in income

shift to the
20 -
. -. . . . . -.

!
increases demand
right .

, ,,
, ,,
,
D2
10 - i
,
D
, * §.us#Ht;--wiG
'
÷
'
Q / units
t.GS# shift @ 100,2
405° too
-
(5) I;) @
shift left
@ Highs

3. Taste .
. . . Increase Decrease → AD positive Relation .

price

100 7 -
so

j-s-WKDz.IT#-H--wbf-f-
←
→ G.
↳ I

D, 1%2%5.4 .UA .
-

AHH A *
☐
Q / Units
i
3 •
i

to to

4.
population . . . . .
Increase Decrease → DD /positive
(market size / )
payers
241^9
.tw/JLlf?1iH.W--liitt.-gxIl&p-s
price :# #

20 -
•

← D2
Di
D3

40
7 1

too
Q&a its
?⃝
E. of substitute goods /
Increase Decrease → DD /pos÷¥ e
price
.
. -

price
t.IM substitute -

g. a
¥016 i9HJ # * i'm
Is
Dz ↳

.IN#HypridKdli DiHypridEsW1J,.W1yQ/Hyprid
Jit
price of substitute goods
.

petrol cars Hypridcars

Price Demand
800 5

1200 7

160 15

1200 20

230 40

6-
price of Complementary goods . . - Increase /Decrease → D / Inverse
P iMWow÷
TP 5%41 ①
to
→

← price Demand
800 5
Dz
600 15
☐
'
☐3
500 20

Q 300 40
What is supply
A desire to
produce good render a service
pending the availability of
economic resourses at a certain price and a certain time date .

Three Time 8
7. short run : No economic Resources available
very
.

2. short run : Two to three Economic resources .

All Economic available

long
3. run 1 resources are

of
supply
a. Law E

The
higher the price of good a .
the more of that
good sellers
will available
make over a
specified time period other
,

thingsAt being equal .

large
higher prices quantity will generally be supplied than
,
a

at lower
prices all other things held constant
, .

-
At lower prices smaller
,
quantity will generally be supplied
a

than at
higher prices all Other things held Constant
,
.
 of
Supply
Determinants Factors

factor in Quantities
7.
causing change A-
.

7.
price increase Decrease
-
→ positive Qs .

II. factors
# of
causing shifts in
supply
2.
producers positive → As

3.
Technology positive → As

4. weather positive As →

5. Governmental subsidies positive → AS

6.
Expectation .
Inverse→ AS
7
:p at substitute goods in production Inverse→ Ss
.
.

factors Inverse
8.
price of production As →

9. Tax Inverse→ Is
 supply -

8- Cost of inputs . Decrease /Increase → As INVERSE

. - /
✗
shift
# j^ & price 11 lie
-

Try
-

Subside _-

food
security §WkH
-

strategic product -

9.
Tax - . .
Decrease / Increase → As ltnverse
I
 disequilibrium .

±
Draw the final Equilibrium point .

53
p Sz S
,

£5
•

• E
,
Ey • •

• E
£3
A, D,
D} Dz

Q
① of substitute goods decreased t.mn mi >

price
. ,
,

price of susbsto ADI

. →
positive →
shift to left .

② preferences /taste deteriorated/ decreased

affection D taste & →
Df →
positive → shift to the left .

③ weather became bad .

affect on S weather & → Str -

positive shift to the left
-

④ Expectation of increase price →

in

ADP shift to
affect on DP → the
rightleft
affect on S I →
SSI shift to the .

The final Equilibrium point at the curve

is Es
 P 52g
,

E
•
Go •4
£

Dz
Sg D,

① Government Taxes-

were increased
P→b relation → shift to the left
tax
Supply I → inverse .

② Increased Income .

income P → A Demand P→ positive relation → Shift to the right .

③ Breach /advancement *
Technological through
technology
P → A
supply
P →
positive relation→ shift tothe right

④ prices of Goods increased .

No shift .
-

The final Equilibrium point is Ey .

A. market with a
price ceiling
MP S
#

☒•
3
-
- - - -
- - - - - - - -

Jr
I
'
price
ceiling
☐ & :& "
:•

µ ÷,
, ☐

j-fQ
' ⇐
-75 100

DQ →
DP -
Sf disequilibrium

SQ price ceiling .

↳ big

shortage
DQ A
 S2
Dz Sz
g
,

EY
E3
•

•
•
EL
•E
,

D
,

prices of substitute
①
goods in production increased .

price
P →
AS & → inverse shift the left
o

② Expectation d- price increase

expectation 9 →
ASK → inverse
stricto left

prices of goods decreased

⑧
complementary shift to the
.

complementrg & APP→ inverse →

right
 Ñ< impose
" " force
controls on
prices
Idiots / Governmental Intervention )
believe the market unfair
• Are

to
enacted when
usually policymakers price is

buyers or sellers .

•
• Result in governments -
created price
ceilings
and floors .

Price
.

A--

legal
Ceiling onlhepriceatwhichagoodcanbesold
Maximum .

'
Price floor .

the price at which

-
A
legal Minimum on agoodcanbesold .

A- market with a
price ceiling .

priced -

bread s

3 i. - - - - - - - - --
&•
equilibrium i

price 2 •• ! ;• price ceiling

µ
,

shortage '
;
D
i. : :
0 ⇐
*
'
bread
Quantity d-
100

cquiliprium

The isacommonfaetor
QuantityQuantity supplied) (
shortage
%
price 150 )
changes in
Quantity Tnepricefsbrs Did
 public servant --

g↳gG = 651

a- HE -50
shortage § MM 2,41 -s
;# -

Cota (same ) imports _&i←

quantityIIIb .

-
2-81151 -

← * I informed econo / ④ 1*-1 shadow

☒
economy
maorkel.ME/I2sUpu-
. to -162 Black

Governmental Intervention

world trade
-
WTO --

organization Towie :w%s

# ⇐ Him

Qsi.J.WIipbi@lgIpijnUeqnals_wiogiii.s
%
-
-

Surphs ⇐ -

price
ciecig
.
-

maximum
-
.

F
minimum -
price floor = 21 i →
changein Quantities

z-w.ie#-F1s-q-G--
•

1%4
,
↳

The
Rationing function of prices
e. Non -

price
rationing * ~
.

( price price floor)

↳2.

-
rationing
price
Rationing by queues / waiting in
Ciel
lineing ex
-

: black
friday .

gi§ -

Rationing by random
assignment or
coupons ( sharing .
EA

Quantity
•
Restrictions
EATEN
-

-
 "

I
Quantity Restrictions :

• Governments can impose

quantity restrictions most obvious . -

banning ownership
or
trading on a
good ,
ex : Human
Organs
.

and
• Government
prohibitions licensing Requirements
- Some Comm ities cannot be
purchased at all
legally
others license % -0%11
require a . .
>%

Import Quota
'
•

# YAI
'
-

supply restriction that prohibits the iifporl-al-i.us of more

than
specified quantity of particular good
.

a a

The
chapter¥
#
price System and market
freemen b- ¥611 § # He YA -5

SID sibs
voluntary exchange E-
: >

An act of between individuals

•

trading voluntary
Make both parties to the trade
in the price

systemoff ( .

subjectively
of Demand)
better
supply
•

•
Markets are low cost
Market reduce transactional costs
institutions for
facilitatingexchange
All of the costs associated with
•
exchange .

including
8

-
The informational costs of
finding
out the
price and quality service

and Cham por at com arts

record ,
durability of product
a .

of
-The Cost
contracting and enforcing that contract I# I 6W .

-
The more
Organized the market the lower thetransactional costs sÑyÑ
. . .

-
Middlemen ( intermediaries or brokers reducetransaction costs by providing
information to buyers and Sellers .