General information for basic understanding of the Economic System.

1. 1
Economics 101
Presented by: Jennoa R. Graham, Ph.D.
Friday, April 4, 2014

2.  Economics – A social science that focuses on
the process of producing and exchanging
goods/services
 Microeconomics – Focus on a single/small
portion of the whole economy; one company
or one city
 Macroeconomics – Focus on the whole
economy; entire country or entire world
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3.  Tangible – Product that you can touch
 Clothing
 Car
 Food
 Intangible – Services that you cannot touch
 Electricity
 Indoor Plumbing
 Knowledge/Skills
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4.  The Economic System – Macroeconomic
decisions of
 Products
 What should be produced?
 How much should be produced?
 How/Where the products will be distributed?
 Services
 What services are needed?
 How will these services be performed?
 Where will these services be available?
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5.  Supply – Quantity of goods/services available
for sale
 Demand – Quantity of buyers wanting to
purchase goods/services available for sale
 The Market – manipulation of supply and
demand to meet micro and macro needs of
the Economic System; must be managed 24/7
and impacts the world economy
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6.  Supply and Demand Graph
 The Economic System
 The Competitive Market System
 The Financial Market System
 Other Economies
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7. 7
P = Price; Q = Quantity; D = Demand; S = Supply
As Demand goes
down; quantity
available for sale
stays high
(fewer sales).
D Shift left = decrease
D Shift right = increase
S Shift none = constant
As Supply goes up;
quantity available
for sale stays high
(inventory on hand).
Best Price

8.  Traditional
 Based on Family and
Community Interaction
 Heavy dependence on
customs and rituals
 Market (Pure)
 Based on the selection
AND consumption of
goods and services from
Individual Consumers
 Command (Planned)
 The government decides
ALL aspects of
Consumer selection and
consumption
 Mixed
 The government decides
SOME aspects of
Consumer selection and
consumption
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http://www.slideshare.net/Geckos/the-four-types-of-economic-systems-presentation

9.  Form when many Producers/Manufacturers
compete with one another to offer products to a
large group of Consumers for PROFIT
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10.  Primary
 Starting line for
financial products
 Origination Details
 Contracts Drawn
 Securities issued
 1st Buyer gets 1st Dibs
 Secondary
 Buyers and Sellers
resell financial
products to 3rd Party
 Stock Exchange
 3rd Party assumes all
contract risk/liability
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 “Financial products, including the supply of credit, mortgages,
company shares and insurance, are bought and sold in primary
and secondary financial markets.” (Economics Online)

11.  Money Markets
 Purchase and sale of
short term debt (<1yr)
 Loans
 Treasury bills
 Purchases are made to
help other banks short
on cash
 Sales are made to
increase available cash
on hand
 Capital Markets
 Purchase and sale of
long term debt (>1yr)
 Stocks (stock exchange)
 Bonds
 Company shares
 Purchases are made in
hopes to sell at a profit
 Sales are made to make
a profit or avoid large
losses
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12.  Mortgage Markets
 Making long term
loans for buying
property and earning
interest profits
 Sales are made to
increase available
cash on hand
 Or avoid large losses
on high risk loans
 Insurance Markets
 Transferring risk from
one party to another
 Transfer is made in
hopes that premium
income is greater
than claims paid –
profit earned
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13.  Contemporary – A comparative analysis of the
changes in the global economy over 50 years
 Capitalism – Private owners control the Market
Economy (see slide # 8)
 Participatory – Production and distribution of goods
are provided by the public
 Gift – Goods and services are distributed with out
expectation of return or profit
 Barter – Goods and services are exchange for other
goods and services with no monetary/currency
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http://en.wikipedia.org/wiki/Economic_system

14.  Economics is social science that focuses on the
process of producing and exchanging
goods/services on two levels
 Micro = Small
 Macro = Large
 Supply and Demand determines price of goods and
services for Consumers
 Stock Exchange is a finance product that is part of
the Secondary Financial Market
 There are many different type of ecomonies
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16.  The American Heritage® Dictionary of the
English Language (2009), Fourth Edition,
Houghton Mifflin Company. Retrieved
September 9, 2013, from
http://www.thefreedictionary.com
 The Four Types of Economic Systems (2008),
by Brian Coil, High School Teacher at
Armstrong School District. Retrieved
March 27, 2014, from
http://www. slideshare.net
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17.  Alison: A New World of Free Certified
Learning (2014). Retrieved March 26, 2014,
from http://www.alison.com
 Economics Online (Unknown). Retrieved
March 27, 2014, from
http://www.economicsonline.co.uk
 Wikipedia: Economic System (2014).
Retrieved March 27, 2014, from
http://www.wikipedia.org
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