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Lecture 3 Economics

Lecture 3 Economics. Economics. Definitions. Economics A Social Science Concerned with How Scare Resources Are Allocated Microeconomics Study of Individual Level Economic Macroeconomics Study of National Level Economics. Microeconomics. Formed Around of Supply and Demand Demand

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Lecture 3 Economics

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  1. Lecture 3 Economics

  2. Economics

  3. Definitions Economics A Social Science Concerned with How Scare Resources Are Allocated Microeconomics Study of Individual Level Economic Macroeconomics Study of National Level Economics

  4. Microeconomics Formed Around of Supply and Demand Demand The Consumer’s Willingness and Ability to Acquire Goods and Services Supply The Supplier’s Willingness and Ability to Provide Goods and Services Equilibrium Point where Supply Equals Demand

  5. Supply and Demand Curves

  6. Supply and Demand Curves Supply Curve – Parallel Relationship As the Price of Goods and Services Increases, Supply Increases As the Price of Goods and Services Decreases, Supply Decreases Demand Curve – Inverse Relationship As the Price of Goods and Services Decreases, Demand Increases As the Price of Goods and Services Increases, Demand Decreases

  7. Shifts in Supply and Demand Shift in Supply Curve Shift Depending upon Costs of Inputs and Factors of Production, Cost of Technology, Taxes, and Number of Suppliers Shift in Demand Curve Shift Depending upon Customer Preferences, Buyer’s Incomes, Price of Complementary and Substitute Goods, and Future Expectations

  8. Shifts in Supply and Demand

  9. Economic Systems Communism Government Controls All Industries; No Private Ownership Socialism Government Controls Major Industries; Some Private Ownership Capitalism No Government Control of Industries; Only Private Ownership Mixed Economy Mix of Private Ownership with Some Government Oversight

  10. Economic Systems Spectrum

  11. Private Enterprise System Market Economy or Capitalism Four Types of Competition Pure Competition -Similar Products, Many Competitors Monopolistic Competition -Different Products, Few to Many Competitors Oligopoly - Similar or Different Products, Very Few Competitors Monopoly - No Competing Products or Competitors, Government Regulated

  12. Degrees of Competition No Competition Much Competition Monopolistic Competition Perfect Competition Oligopoly Monopoly

  13. Economic Performance Business Cycle Cycle of Growth and Decline Gross Domestic Product Sum of Goods and Services Produced Consumer Price Index Average Change in Price of Goods Unemployment Percentage of Workforce Actively Seeking Work

  14. Business Cycle

  15. Gross Domestic Product

  16. Consumer Price Index CPI Basket

  17. Unemployment

  18. Managing the Economy Monetary Policy Increasing or Decreasing the Supply of Money in an Economy Fiscal Policy Government Activities in Spending and Taxation Includes Federal Budget Foreign Country Debt Forgiveness

  19. Challenges • United States Information Economy Losing Manufacturing Jobs • Less Developed Countries Becoming More Competitive with Technology • Aging Population in Western Europe and US with Dwindling Birth Rates • China and India Now One-Third of World’s Population • World Held Hostage by Terrorism

  20. Final Word

  21. Lecture 3 Economics

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