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Economics

Explore the fundamentals of economics, including macroeconomics and microeconomics, factors of production, supply and demand, and the relationships between different enterprises.

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Economics

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  1. Economics It may be the most boring topic you will ever discuss, but also the most important.

  2. Economics defined • The allocation of limited resources to satisfy unlimited wants.

  3. Macroeconomics • The study of the total economy • GNP • Inflation • Unemployment • Recession

  4. Microeconomics • Concerned with individual decision making • Budgeting • Lending • Accounting (Record Keeping) • Advertising • Marketing

  5. 4 Factors of Production • 1) Labor - physical talents • 2) Land - Natural Resources • 3) Capital - building, equipment, machinery, money • 4) Entrepreneurship - “the brains”

  6. Economic Terms that will make our conversations easier in here • 1) Good - “thing” that has value or may be exchanged for a price • 2) Opportunity Cost - The value of the alternative surrendered when a choice is made. • 3) Supply - the amount of a product that producers are willing to sell in the market at various condition • 4) Demand - the amount of a good that people are actually willing and able to buy given the prices and choices available.

  7. Law of Supply • The Law of Supply states that when the price of a product is lowered, with no change in other factors, less of the product will be supplied. • Factors that affect Supply?

  8. Law of Demand • The Law of Demand states that when the price of a product is increased with no change in other factors, less product will be purchased. • Factors that affect demand? • Size of population affects demand. • Tastes and preferences of consumers affects demand. • Income and distribution of wealth affects demand. • Relative prices of all goods and services affect demand.

  9. Relationship between supply and demand • A. Price is found at equilibrium, where the supply and demand curves intersect. • B. If demand curve shifts right, the price increases. • C. If supply curve shifts left, the price increases.

  10. Relationship between enterprises • Supplementary enterprises are those where one enterprise supplements the income of another. • 1. A sports stadium is often used for concerts. • 2. A lawn tractor can be used to move snow. • 3. Making a corn maze.

  11. Relationship between enterprises • Complementary enterprises are those where one enterprise produces the inputs for another. • 1. Soybeans used in rotation to leave nitrogen for corn. • 2. Tree trimming service may sell mulch.

  12. Relationship between enterprises • Competitive enterprises are those where one enterprise interferes with another. • 1. Enterprises competing for labor resources. • 2. Students who work so much that they do not have enough time to study. • 3. Corn and Soybeans

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