Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

A

DAM SMITH who is kown to be the father
of economics,”Scottish
Philosopher”published a book with the title
“Wealth of Nation”
...

In other words ,”the social science which
studies human behavior as a relationship
between ends(wants) and scarce means
(resources) which has alternative users
...

DEMAND:
An economic behavior/principal that
describes a consumer’s desire and willingness to pay price
for a specific goods or services
...

“Factors

of Production”

FOP are input into production processes
because there are resources to
produce,goods and services
...
It gives land rent
...
It gives interest yo it
...
Provide wages to
them
...
Enterpreneurs can be the
owners or managers of firms
...
Specially such
topics as markets,prices,industries demand and
supply
...
like;
1
...
When producing:
It includes our choice on
what to produce as a producer?
3
...
Like how
negotiation,production cost etc
...

Macro economics can be defined as ,”A
branch of economic analysis which
considers the overall performance of
economy with respect to the total
national income,consumption,average
prices and employment level
...


“MARKET”
Market is a geographically defined area where buyers
and sellers interact to determine the price of a
product or set of products,whereas industries are
supplier sides of the market
...
Example;”Agricultural markets” because they
establish only one price
...
Non-competitor markets may set many prices
for the sale product
...
e
...

MARKET EXTENT:
A MARKET economy is an
economic system where markets continue to play a
dominant role but are regualated to some EXTENTS
by government
...
Geographical Boundaries:

An interesting
phenomenon has raised it’s head in recent
time where companies are focusing on
regional markets in an effort to counter
globalization
...
For example;PEPSI
has four regions within USA to focus on
individual market segment and designing a
market program
...
Range of Products:
A set of variations of the
same product platform that appeal to
different market segments
...

“PRODUCER DEMAND”
An economic behavior shown by the manufactures of
some products which includes their ideas for
producing items,prices and their resources
...
e
...
What to produce?
It includes their ideas on
commodities to produce
...
How to produce?
This step includes the
producers mechanism for production of goods
like cost on production(machinery) and labour
etc
...
Whom to produce?
It includes their ideas on
market production like for whom they want to
produce
...
What products do we produce?
II
...
Who consumes the products?

“ THE PRODUCTION POSSIBILITY
FRONTIER”
The PPF curve shows the possible combinations
of goods and services available to an economy
given that all productive resources are fully and
efficiently employed
...
When the economy is at point “i” resources

are not fully employed while at point”d” is when
resources are efficiently used
...

The Supply Curve:
The supply curve shows how
much of a good producers are willing to sell at a
given price,holding constant other factors that
might effect quantity supplied
...
Labor
II
...
Raw-Material
The Demand curve:

The demand curve shows how
much of a good consumer are willing to buy as the
price per unit changes holding non-price factors
constant
...
income
2
...
Price of related goods
Substitutes
Complements
The Market mechanism:
Characteristics of the
equilibrium or market price;
1
...
No-shortage
3
...
No pressure on the price to change
The market price is above equilibrium:

There is no shortage
...

Quantity demanded decreases and quantity
supplied increases
...

Equilibrium price decreases to P2 and
quantity increases to Q2
...

The shape of supply and demand curves
...
Market of eggs:
The real price of eggs fell 59%
from 1970 to 1998
...

2
...

Supply decreased due to higher cost of equipping
and maintaining modern classrooms,laboratories
etc
...


“ELASTICITY”
Elasticity of demand:
Price elasticity of demand
measures the sensitivity of quantity demanded to
price changes
...

Assumptions:
• Consumer is rational
...

• Diminishing marginal rate of substitutions
...

• Consistency and transitivity
...

Properties of in-difference curve:

There are infinite number of in-difference
curves in the commodity space
...


In-difference curves don’t intersect each
other
...


In-difference curve are convex to the origin
...

Quantify means
digitize



---