Week 1: Economics

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 Week 1: Economics
Please make sure you are using the Chrome Browser
Every day, visit Moodle > Student Consultations
Have you checked in today?
Viewed the latest announcements? Answered the daily questions?
What is economics?

What do you think?

What is economics?

The best!
Wonderful!
The world!
Fun!
 Week 1: Introduction to economics
Please make sure you are using the Chrome Browser
Every day, visit Moodle > Student Consultations
Have you checked in today?
Viewed the latest announcements? Answered the daily questions?
What we will do today:
• Moodle navigation
• Course overview
• Assessment
• Online text – Economics for Today 7th edition.
• Consultations
• Course resources – pre recorded short videos/lectures and learning guides
 Moodle Navigation
and Course Overview
 What is economics?
Economics is the study of how society
organises its scarce resources to produce
goods and services in order to satisfy its
unlimited wants
What is economics? Videos to help are below:
Explore economics: https://www.rba.gov.au/education/explore-
economics/study-and-careers/

What is economics? https://youtu.be/ct-L27SIRmk

Why study economics? https://youtu.be/KwQbnNzxUHo

What does the term “Ceteris paribus” mean?

Meaning: _____________________________________________________
Learning objectives

§Describe the 3 main economic systems

§Distinguish between macroeconomics and
microeconomics
 Macroeconomics Microeconomics
Term 2: The study of the economy as a whole Term 1: The study of smaller economic
(aggregates or totals) units
• Market theory
• Individual demand
• Firms and supply

https://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjvn_PA547dAhVLMd4KHcaiDNYQjRx6BAgBE https://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjU247m547dAhWQd
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fzflfTw1HJN8Xz&ust=1535513518668417
 The economic problem
Peoples’ wants are unlimited

but
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resources are scarce

 Economic systems
Economic systems are used to solve the 4
economic
questions:
§ What to produce?
§ How much to produce?
§ How to produce?
§ How to share production?
 How economies differ?
Economies will be organised and make decisions differently including:
How was the government established?
Democracy (vote) or dictatorship or monarchy
What are the goals of the economy?
Social or military or environmental?
What types of economic behaviour is encouraged?
Private business ownership?
 How economies differ?

What incentives or disincentives support economic behaviour?

Wages or profit or the role of taxation
What is the pattern of resource ownership?
Private or shared
What is the role of government in providing essential services?
Transport and/or health and/or education
What are the major economic institutions?
Trade unions, securities (stock) exchange, private and/or
government owned businesses
Types of economic systems

Market (no
examples)

Mixed
Centrally
(some government
planned/command
involvement)

Types of
economies
 The market economic system
All main decisions about production and distribution are made
by private individuals and businesses.
Also called:
Capitalist
Free enterprise
Laissez Faire
Unplanned
 Main features of the market economic system

Private ownership of property, resources

Economic freedom – enterprise, choice
Self interest and the profit motive
High level of competition
Operation of the price mechanism (the forces of demand and
supply through buyers and sellers determine the prices of
goods and services and the changes therein)
Minimal government interference
 Disadvantages of the market economy system

Large inequality of income and opportunity – depends upon

resource value
Non profitable goods not provided
Fails to consider social costs e.g pollution
Misallocation of resources – none production of “bad” goods
Reduced competition - some firms may dominate the market
Instability of economy - upturns and downturns in the economy
 Main features of the mixed economic
system
Governments may intervene through:
What will be produced?
Taxation and Government spending

How goods will be produced?

Rules over production and business

How production will be distributed?

Taxation system, transfer (welfare) payments, providing goods and services
 So are you
loving
economics?