What do I think about economics?

It is the study and knowledge that involve the production, and consumption
creating wealth. Distribution of goods and services.
 Why particular goods and services are produced?
According to economic theory, the consumption of goods and services is assumed to
provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and
services in the course of producing other goods and services.

 How is this production distributed to meet the needs of individuals?

For next week choose the company you want to talk about.
 I want to talk about.
Make a diagram.
https://www.youtube.com/watch?v=W5OmRo8mKzM&t=303s
Orthodox economy:
WEEK 2
Factors of Production.
• Land – includes raw materials, e.g. Oil, Gas, minerals, metals
• Labour – everyone who works for an employer
• Capital – machinery, computers, office space, shops
• Enterprise – brings land, labor, and capital together and organizes them
into units that can produce products in the pursuit of profit.
Entrepreneurs: risk takers and innovators creating enterprises.

Production Possibility Frontier: Looking at the world, the amount of land,

labor, and capital is limited – it is finite. Economists use the production
possibility frontier to illustrate the consequences of finite resources to produce
goods and services.
• Finite Resources
• Opportunity Cost
 • Macro and Microeconomics
• Market, Planned, and Mixed Economies

PPF shows all possible combinations of pizza and beer, and it shows what it is
possible to produce with a limited amount of resources.
If the PPF is INEFFICIENT, meaning some resources are unemployed and
operating outside the PPF is not possible
Opportunity cost: If pizza production was reduced to make more beer, then
the opportunity cost is the benefits that could have been received from the
pizzas that have not been made.
Applications: It means that the population will choose how to spend their
money affecting beers or pizzas, depending on choices. An example is if you
want to buy chocolate or wine. The first chocolate is desirable, but once you
have eaten ten it might not be so. You will be willing to sacrifice some
chocolates to get some wine.
Finite resources: Finite resources are non-renewable and will eventually run out.
Metals, plastics, and fossil fuels.
Opportunity cost: it means if you chose one activity you are giving up the opportunity to do a
different option.

Demand and supply: These are fundamental for a business and have firm
objectives which are:
Maximizing the amount of profit made, market share, and total revenue.

Factors influencing demand show a negative relationship between price and

quantity demanded.

• Price of substitutes and complements

• Consumer income
• Tastes and preferences
• Price expectations
WEEK 3
BEFORE WEEK 6, have

SELLERS SUPPLY

MARKET
BUYERS DEMAND

The market needs to be supplied with something needed and make it available to the buyers
and of course focused on generating profit. It is a difficult structure that depends on offers
and demands “Prices, quality, competitors”.
If you are a seller you must know about changes in the market, your customers, and
competitors and how they would affect your business.
Equilibrium price: Equilibrium is a situation in which economic forces such as supply and
demand are balanced and in the absence of external influences the values of economic
variables will not change.
Elasticity: A measure of the responsiveness of demand to change in price.

Elasticity and business:

 Competitive strategies
 Decisions about prices
 Promotion
 Product placement.

Measuring Elasticity: There is a formula.

ε = Percentage change in quantity demanded

Percentage change in price
OR
Change in quantity demanded x
Price______
Change in price Quantity
demanded
Income Elasticity: Income Elasticity = Yε = Percentage change in demand

Percentage change in income

The product life cycle is the succession of strategies by business management as a product
goes through its life-cycle. The conditions in which a product is sold changes over time and must
be managed as it moves through its succession of stages.

MY COMPANY: “SONY”
1. Company operations, policies, practices, and targets.
2. Competitors.
3. Case of study: Analysis and evaluation.
4. Conclusion.
It will need to have
1. Information.
2. Analysis and assessment evaluation.
3. Stance on environmental issues.
4. Conclusion.
WEEK 4

Output and productivity in the short run:

Long and short run, Variable fixed and total cost, and marginal costs. We
assume Capital is a fixed factor and Labour is a variable factor.
• In the short run one factor of production, usually capital, is fixed.
 • In the long run all factors of production are variable.

This means that if all capital is used more will be

produced if we have more people without the
capital.

At some point employing more people will increase productivity,

but once we touch the highest point of productivity keeping
increasing staff will decrease our marginal product.
Now having this knowledge, we understand that:

A
WEEK 9: Oligopoly
Market with small number of large players, each firm has significant share of
the market. In oligopolies firms set prices and there is no price competition.
If all firms in an oligopoly cooperate, they could act such as monopoly to fix
prices and get the highest level of profit.
If they are few powerful companies, there is no competence.

Natural Entry Barriers

Exogenous cost: This acts as a barrier to entry because small

firms have too high levels of costs.
WEEK 10

How firms’ grow.

There are three types of growth.

 Horizontal: occurs at same stage of production.
Reducing cost, benefit the production scale and rationalisation
between companies.
 Vertical: Occurs along the value (Logistic, operations,
marketing, sales).
Grows by acquiring or merging. Also, location benefits.
 Diversified: This occurs when a firm moves into an
unrelated market.