Basic Knowledge of Economics

2. ECONOMICS
“In economics, you will explore how
real people make real decision
regarding how to spend their time,
their money, and other limited
resources”
Our Aim is to Help you see how
ECONOMICS
Affects all of us every day.

3. WHAT IS ECONOMICS ?
What studying economics pay off
Reason #1 :
It helps improve your decision-making skills as you explore the
opportunity costs of real-life choices.

4. WHAT IS ECONOMICS ?
What studying economics pay off
Reason #2 :
It provides insight into how goods and services are priced, which is
useful as you negotiate through life as a consumer, businessperson,
or wage earner.

5. WHAT IS ECONOMICS ?
What studying economics pay off
Reason #3 :
It helps you interpret, evaluate, and react to changes in the world
around you in such areas as government spending, international
trade, and market fluctuations.

6. PRODUCTION POSSIBILITIES FRONTIER
For Example, if producing
twenty-five new “units” of
health care forces us to
forgo producing three golf
courses, the opportunity cost
of our health care choice is
three golf courses.
“ Perfect Efficiency
”
B
A
A => ?
B => ?

7. THREE BASIC QUESTIONS
“Resources are limited”
“Scarcity”
“Every economy must
deal with 3 basic QUESTIONs.“

8. THREE BASIC QUESTIONS
I.What will be produced ?
(Which goods ? Which services ? How much of
each ? ) II.How will it be produced ?
(Who will produce the goods and service? )
III.Who will get what is produced ?
(How will goods and services be distributed among
individuals in the economy ? Targeted group )

9. The science of economics
Often “the reader” read about various economists who can’t
agree on a particular fact or issue.
Is unemployment rising or falling ? Is the economy is a
recession or a recovery ? What should be made to keep the
economy “on track” ?
There never seems to be a single answers.
As a result, many conclude that economics must be more
art than science, based more on subjective opinion than on
objective fact.

10. So it’s important to say that economists observe consumer, producer, and
market behavior, identify factors that may affect that behavior, and test their
theories against reality.
Y Y
Labour
(hours)
Output (tons) Purchases
(baht)
Savings
X X
The line representing a direct
relationship always slopes upward.
Two variables whose values move
in opposite directions are said to
have an inverse relationship.

11. THE MARKET
Market Equilibrium
If you say to Microeconomics, we
have focused on the factors
influencing individual behavior.
How does a single consumer
select among competing
products ?
How does a single producer
determine the optimal scale of
production ? Now, with a basic
understanding of the individual
factors, it’s time to pull the pieces
together and explore how they
combine to influence overall
behavior in a highly competitive
market.
“ Surplus”
“ Equilibrium”
“ Shortage”
E
Q*
E ; At this point, there are no market forces
prompting the price or quantity to change.
P*
Demand
Supply

12. Economics Every
day
For Example, you may be grappling with the decision of whether to go
directly to college after high school or to begin full-time work instead.
Many economic concepts are involved in this decision.
Conditions
I. decide to go directly to college
II. decide to work full time
Opportunity Cost ?
Be discuss

13. Economics also affects everyone indirectly.
All of us are affected by macroeconomics decisions made by the
government.
If the government raises income taxes, people’s net income will decrease.
Or if trade restrictions are imposed, the price of imported goods will
increase, affecting our consumption.