The document discusses the basic economic problem of scarcity. It explains that resources are limited while wants are unlimited, leading to scarcity. This forces economic agents like individuals, firms, and governments to make choices that involve opportunity costs. The production possibility curve (PPC) is used to show the maximum possible combinations of two goods an economy can produce with full employment of its limited resources. The PPC can shift inward or outward due to changes in the quantity and quality of resources.
The document defines key economic concepts such as scarcity, opportunity cost, production possibility curve, and types of economies. It then discusses consumer theory including utility and diminishing marginal utility. Specifically:
1) Economics studies how individuals and societies make choices given scarce resources and unlimited wants. Opportunity cost is the next best choice given up when making a decision.
2) A production possibility curve illustrates the tradeoffs between two goods based on available resources. Shifting the curve shows how changes like technology affect what can be produced.
3) Economies differ in how decisions are made - socialist, capitalist, and mixed economies allocate resources in different ways. Consumer theory analyzes how utility and marginal utility influence consumption choices.
This document provides an overview of microeconomics concepts including:
1. Definitions of economics focusing on scarcity and choice. Economics studies how people allocate limited resources among competing alternatives.
2. Basic economic concepts of scarcity, choice, and opportunity cost are introduced. Scarcity means human wants exceed limited resources. Choices must be made due to scarcity. Opportunity cost is the next best alternative forgone in making a choice.
3. A production possibilities curve (PPC) illustrates scarcity, choice, and opportunity cost through the various combinations of goods an economy can produce with limited resources. Movement along the PPC involves opportunity costs while points inside or outside the curve represent inefficiency.
This chapter introduces key concepts in economics and agricultural economics. It defines economics as dealing with how consumers and producers allocate scarce resources to meet infinite wants. Agricultural economics focuses on allocating resources for food and fiber production. Economics studies how individuals and societies make choices given scarce resources and unlimited wants. The chapter also outlines microeconomics, macroeconomics, positive and normative economics, factors of production, and different economic systems including market, command, and mixed economies.
This chapter introduces the core concepts and goals of economics. It discusses how scarcity requires economic choices about what to produce, how to produce it, and who receives goods and services. The production possibilities curve (PPC) illustrates the tradeoffs between choices. Markets and governments provide different approaches to these economic questions. The chapter establishes understanding economic decisions and tradeoffs as the foundation for further microeconomic and macroeconomic analysis.
Microeconomics i: Basic concepts in EconomicsUpananda Witta
This document provides an overview of key economic concepts covered in introductory economics including:
- Definitions of economic and non-economic goods and the production process. The four factors of production: land, labor, capital, and entrepreneurship.
- The concept of scarcity and how it leads to trade-offs requiring rational choice between alternative uses of limited resources. Opportunity cost is explored through examples.
- Demand analysis including the difference between demand and effective demand. The law of demand and factors that influence demand like price, income, tastes.
- Supply analysis including the law of supply and factors that influence supply like price, costs of production, and technology.
- Equilibrium concepts where
Economics lesson for Surefoot International School, CalabarSayli Tongaonkar
1) People's wants for goods and services are unlimited, but the resources used to produce them are scarce. This creates an economic problem.
2) Scarcity means societies must make choices about how to use limited resources to satisfy unlimited wants. It leads to decisions about what goods and services will be produced and who will consume them.
3) The basic economic problem is how to allocate scarce resources among competing ends to satisfy unlimited human wants. Economics aims to increase people's choices by studying this problem.
This document provides an overview of key economic concepts including:
- Economics is the study of how societies allocate scarce resources to satisfy unlimited wants. It can be divided into microeconomics and macroeconomics.
- The economic problem involves determining what, how, and for whom to produce goods and services.
- Opportunity cost, tradeoffs, and rational decision making are important concepts in economics for understanding how individuals and societies make choices.
The document defines key economic concepts such as scarcity, opportunity cost, production possibility curve, and types of economies. It then discusses consumer theory including utility and diminishing marginal utility. Specifically:
1) Economics studies how individuals and societies make choices given scarce resources and unlimited wants. Opportunity cost is the next best choice given up when making a decision.
2) A production possibility curve illustrates the tradeoffs between two goods based on available resources. Shifting the curve shows how changes like technology affect what can be produced.
3) Economies differ in how decisions are made - socialist, capitalist, and mixed economies allocate resources in different ways. Consumer theory analyzes how utility and marginal utility influence consumption choices.
This document provides an overview of microeconomics concepts including:
1. Definitions of economics focusing on scarcity and choice. Economics studies how people allocate limited resources among competing alternatives.
2. Basic economic concepts of scarcity, choice, and opportunity cost are introduced. Scarcity means human wants exceed limited resources. Choices must be made due to scarcity. Opportunity cost is the next best alternative forgone in making a choice.
3. A production possibilities curve (PPC) illustrates scarcity, choice, and opportunity cost through the various combinations of goods an economy can produce with limited resources. Movement along the PPC involves opportunity costs while points inside or outside the curve represent inefficiency.
This chapter introduces key concepts in economics and agricultural economics. It defines economics as dealing with how consumers and producers allocate scarce resources to meet infinite wants. Agricultural economics focuses on allocating resources for food and fiber production. Economics studies how individuals and societies make choices given scarce resources and unlimited wants. The chapter also outlines microeconomics, macroeconomics, positive and normative economics, factors of production, and different economic systems including market, command, and mixed economies.
This chapter introduces the core concepts and goals of economics. It discusses how scarcity requires economic choices about what to produce, how to produce it, and who receives goods and services. The production possibilities curve (PPC) illustrates the tradeoffs between choices. Markets and governments provide different approaches to these economic questions. The chapter establishes understanding economic decisions and tradeoffs as the foundation for further microeconomic and macroeconomic analysis.
Microeconomics i: Basic concepts in EconomicsUpananda Witta
This document provides an overview of key economic concepts covered in introductory economics including:
- Definitions of economic and non-economic goods and the production process. The four factors of production: land, labor, capital, and entrepreneurship.
- The concept of scarcity and how it leads to trade-offs requiring rational choice between alternative uses of limited resources. Opportunity cost is explored through examples.
- Demand analysis including the difference between demand and effective demand. The law of demand and factors that influence demand like price, income, tastes.
- Supply analysis including the law of supply and factors that influence supply like price, costs of production, and technology.
- Equilibrium concepts where
Economics lesson for Surefoot International School, CalabarSayli Tongaonkar
1) People's wants for goods and services are unlimited, but the resources used to produce them are scarce. This creates an economic problem.
2) Scarcity means societies must make choices about how to use limited resources to satisfy unlimited wants. It leads to decisions about what goods and services will be produced and who will consume them.
3) The basic economic problem is how to allocate scarce resources among competing ends to satisfy unlimited human wants. Economics aims to increase people's choices by studying this problem.
This document provides an overview of key economic concepts including:
- Economics is the study of how societies allocate scarce resources to satisfy unlimited wants. It can be divided into microeconomics and macroeconomics.
- The economic problem involves determining what, how, and for whom to produce goods and services.
- Opportunity cost, tradeoffs, and rational decision making are important concepts in economics for understanding how individuals and societies make choices.
Macro economics, G.mankiw, 1-The Science of MacroeconomicsDr. Arifa Saeed
This document provides an introduction to macroeconomics. It discusses important issues studied in macroeconomics like inflation, unemployment, and economic growth. It also introduces some key tools used in macroeconomic analysis, including economic models. An example model of supply and demand for cars is presented to illustrate how macroeconomists use simplified models to show relationships between variables and explain economic behavior. The document emphasizes that different models are needed to study different macroeconomic issues.
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This document provides an overview of key macroeconomic concepts including GDP, its components and measurement. It defines GDP as the total value of final goods and services produced, which can be measured through total expenditure or total income. GDP has nominal and real components, with real GDP adjusting for inflation using a base year. Other concepts covered include GNP, the GDP deflator, CPI, stocks and flows. Worked examples are provided to demonstrate calculating GDP and inflation rates. Limitations of CPI in measuring inflation are also discussed.
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This document discusses how government policies like price controls, taxes, and minimum wages can impact markets. It explains that price ceilings, floors, and taxes can create shortages or surpluses by distorting supply and demand. The incidence of taxes depends on price elasticities, with the burden falling more on the less elastic side of the market. Examples like rent control, gasoline price caps, minimum wages, and payroll taxes are used to illustrate these concepts.
This document discusses the impact of technology on various aspects of society and the environment. It notes that while technology was intended to improve lives, it is now negatively impacting social interactions, shaping children's interests, displacing jobs, and reducing literacy skills. Additionally, the large-scale use of technologies is threatening the environment through pollution, resource depletion, and contributing to issues like climate change. However, the document also recognizes that technology itself is not to blame - it is how humanity chooses to develop and apply technologies that determines their consequences. With education and sustainable choices, technology could help solve problems rather than destroy the planet.
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classical theories of international trade.pptxDr. Arifa Saeed
1) Classical theories of international trade proposed by Adam Smith and David Ricardo argue that countries benefit from specializing in goods where they have a comparative advantage and from trading.
2) Ricardo's theory of comparative advantage showed that trade can benefit countries even if one country has an absolute advantage in all goods, by specializing in the good where the opportunity cost is lowest.
3) John Stuart Mill extended Ricardo's theory by explaining how reciprocal demand between countries determines the actual terms of trade that emerge from specialization and trade. The terms of trade will stabilize where the value of each country's exports equals the value of its imports.
1) International trade refers to the exchange of goods and services between countries. It consists of imports, which flow into a country, and exports, which flow out.
2) International trade exists because countries have different resources and production capacities. By specializing in certain goods and trading with other countries, all countries can increase their wealth.
3) International economics studies economic interactions and trade between countries, including topics like globalization, trade patterns, balance of payments, and foreign investment. It analyzes how international forces shape domestic economies.
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Macro economics, G.mankiw, 1-The Science of MacroeconomicsDr. Arifa Saeed
This document provides an introduction to macroeconomics. It discusses important issues studied in macroeconomics like inflation, unemployment, and economic growth. It also introduces some key tools used in macroeconomic analysis, including economic models. An example model of supply and demand for cars is presented to illustrate how macroeconomists use simplified models to show relationships between variables and explain economic behavior. The document emphasizes that different models are needed to study different macroeconomic issues.
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This document provides an overview of key macroeconomic concepts including GDP, its components and measurement. It defines GDP as the total value of final goods and services produced, which can be measured through total expenditure or total income. GDP has nominal and real components, with real GDP adjusting for inflation using a base year. Other concepts covered include GNP, the GDP deflator, CPI, stocks and flows. Worked examples are provided to demonstrate calculating GDP and inflation rates. Limitations of CPI in measuring inflation are also discussed.
THE ROLE OF IMF (INTERNATIONAL MONETORY FUND) PAKISTANI ECONOMY?Dr. Arifa Saeed
The document discusses the International Monetary Fund (IMF) and its role in Pakistan. It outlines the IMF's purpose to stabilize international exchange rates and facilitate development through enforcing liberal economic policies. It describes the IMF's governance structure, including its Board of Governors and Executive Board. It also discusses Pakistan's relationship with the IMF, including the impact of IMF loans on Pakistan's economic policies and the current state of its economy.
This document discusses how government policies like price controls, taxes, and minimum wages can impact markets. It explains that price ceilings, floors, and taxes can create shortages or surpluses by distorting supply and demand. The incidence of taxes depends on price elasticities, with the burden falling more on the less elastic side of the market. Examples like rent control, gasoline price caps, minimum wages, and payroll taxes are used to illustrate these concepts.
This document discusses the impact of technology on various aspects of society and the environment. It notes that while technology was intended to improve lives, it is now negatively impacting social interactions, shaping children's interests, displacing jobs, and reducing literacy skills. Additionally, the large-scale use of technologies is threatening the environment through pollution, resource depletion, and contributing to issues like climate change. However, the document also recognizes that technology itself is not to blame - it is how humanity chooses to develop and apply technologies that determines their consequences. With education and sustainable choices, technology could help solve problems rather than destroy the planet.
Ulrich Beck Theory of Risky World (technoculture & risk)Dr. Arifa Saeed
Ulrich Beck's theory of risk society argues that modern society is increasingly preoccupied with future risks generated by technology and industrialization. Beck defines a risk society as one that deals systematically with hazards introduced by modernization itself. Technoculture both generates risks, like viruses or data breaches, and provides solutions, like anti-virus software, that can paradoxically create new risks. While technology brings benefits to daily life, it also introduces risks regarding privacy, security, and environmental hazards that society must continually negotiate.
classical theories of international trade.pptxDr. Arifa Saeed
1) Classical theories of international trade proposed by Adam Smith and David Ricardo argue that countries benefit from specializing in goods where they have a comparative advantage and from trading.
2) Ricardo's theory of comparative advantage showed that trade can benefit countries even if one country has an absolute advantage in all goods, by specializing in the good where the opportunity cost is lowest.
3) John Stuart Mill extended Ricardo's theory by explaining how reciprocal demand between countries determines the actual terms of trade that emerge from specialization and trade. The terms of trade will stabilize where the value of each country's exports equals the value of its imports.
1) International trade refers to the exchange of goods and services between countries. It consists of imports, which flow into a country, and exports, which flow out.
2) International trade exists because countries have different resources and production capacities. By specializing in certain goods and trading with other countries, all countries can increase their wealth.
3) International economics studies economic interactions and trade between countries, including topics like globalization, trade patterns, balance of payments, and foreign investment. It analyzes how international forces shape domestic economies.
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Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
2. BASIC ECONOMICS PROBLEM /
PROBLEM OF SCARCITY
• In this world, the resources are limited, while the wants are infinite, leading
to the question of scarcity or the fundamental economic problem.
• Limited Resources + Unlimited Wants = Scarcity
3. Economics:
• It is a social science that studies human behavior between unlimited wants and limited resources
with their alternative uses”.
• In other words, it just simply tells us how we can make the best use of what we have in order to
satisfy our needs and wants.
• It is used by three main economic agents’ decision makers in an economy
• Individuals
• Firms
• Government
4. Limited Nature of Resources:
• All the products and energy that can be used to manufacture goods and
services are resources. For example, farming, farmers, machinery, etc.
Resources are of two types:
• Unlimited or free resources / Free Goods: These are unlimited in supply e.g. sunlight,
sea water, air rain etc. These resources are not much of a concern for economists.
• Scarce resources / Economic Good: These are limited in supply. E.g. machines,
building, agricultural area, oil, wheat etc.
5. • All the above mentioned economic agents address the basic economic questions:
• What to Produce?
• How to Produce?
• For whom to produce?
• The production of goods and services take place in two sectors of the economy. The
private section is where firms and individuals produce goods and services whereas the public
sector is where all the goods and services are produced by the government.
• Goods are physical items such as tables, clothing, car etc. whereas services are non-physical
items such as traveling, teaching, internet etc.
6. Needs and Wants:
• Needs are the essential goods and services required for human survival these
include food, shelter, clothing etc.
• Wants are those goods and services which are not essential for survival e.g.
luxury cars, luxury clothing. Thus, bread is a need whereas eating in a 5-star
restaurant is a want.
7. D-side (consumer side) S-side (Producer side)
Wants →are → good & services are resources
satisfied by produced by
Unlimited limited
Basic Economic Problem(SCARCITY)
8. Factors of Production
• These elements are required to carry out a business activity are collectively known as the factors
of production. These include:
• Land: It represents all the natural resources which are consumed during the business activity, e.g.
plains, seas, mines etc.
• Labor: The term refers to any kind of physical or mental human effort, E.g. carpenters, doctors,
etc.
• Capital: The term refers to the manufactured resources required in the production process. E.g.
machinery, tools, equipment, vehicles etc.
• Enterprise: This is the skill and risk-taking ability of the person who brings the other three
resources or factors of production together to produce a good or service. For example, the
owner of a business.
9. • Based on the type of the business these factors of
production will vary in quantity. A company-like car
manufacturing which has a higher proportion of
machinery than labor is known as capital intensive, on
the other hand a business that has a higher proportion of
labor than machinery is called labor intensive.
10. • proportion of machinery › labor (capital intensive)
• proportion of labor › machinery is (Labor intensive)
11. Sectors in the Economy:
• 1. Primary: This sector includes the extractive industries that acquired raw
material from naturally available resources, e.g. agriculture, mining etc.
• 2. Secondary: It comprises of the manufacturing industries that convert raw
material into semi-finished or finished goods. E.g. Textile industry.
• 3. Tertiary: This represents all kinds of services such as banking, retailing, etc.
• All the above-mentioned sectors are interdependent on each other to produce
goods and services. These sectors are linked together in what is known as chain of
production. Example: Oil is extracted from the ground (Primary), then refined in
an oil refinery (Secondary), transported by tankers (Tertiary) and sold at gas stations.
12. Relationship between Scarcity, choice &
opportunity cost
• Choice: selection of something
• Opportunity cost: benefit of next best alternative
sacrificed due to the current choice having made .
Scarcity choices satisfaction
13. Opportunity Cost
• People are forced to make choices due to the presence of the basic economic
problem mentioned above.
• Opportunity costs is defined as the next best alternative forgone.
• In simpler terms, the sacrifice by an individual or organization while giving
preference to one product to the other is known as the opportunity cost of a
particular decision.
• Remember that this is made by all economic decision makers: Consumers,
businesses and government.
14. Example
• 1. Consumer (individual) – An individual has $1000 and he/she can either buy
a laptop or a smart phone. If the individual chooses the laptop the smart phone
becomes the opportunity cost.
• 2. Business (firm) – A business has $1 million. It can either spend it on
expansion to a new country or invest in research and development. If the
businesses choose to invest it in expansion, the research and development becomes
the opportunity cost.
• 3. Government – A government has two options either to build roads or
building schools in the country. If the government chooses to build roads
developing schools would become the opportunity cost.
16. D-side (consumer side) S-side (Producer side)
Wants →are → good & services →are → resources
satisfied by produced by
Unlimied limited
Basic Economic Problem(SCARCITY)
17. PRODUCTION POSSIBILITY CURVES
(PPC)
• Definition: It is a curve that shows all the
maximum possible combinations of two
goods and services which a country can
produce using all of available resources with
efficient technique of production at given
state of technology.
18. Assumptions of PPC: Let’s assume that the
PPC is of Country A.
• 1. Country a produces only two goods agricultural goods and
manufactured goods.
• 2. Economy is operating at full employment, i.e. all available resources are
utilized to produce goods and services.
• 3. Country A has limited number of factors of production. (Land, Labor,
Capital).
• 4. Country is using efficient technique.
19. Explaination
• A – All resources dedicated to the production of Agricultural Goods
• B – All resources dedicated to the production of Manufactured Goods
• C – All agricultural goods produced alongside M1 manufactured goods.
• D – A2 agricultural goods produced alongside M2 manufactured goods cars
• E – This point is beyond the PPC and is unattainable since it lies outside of the
productive capacity of the economy.
• F – This point is within the PPC. The production of both agricultural and
manufactured goods can be increased without any opportunity cost as there are idle
resources in the economy.
20. Explanation
• The figure above shows that if
producers want to increase the
production of manufactured goods
from M1 to M2 the amount of
agriculture good has to be
decreased from A1 to A2. The
opportunity cost of producing an
extra M2-M1 is A2-A1.
21. PPC
• A represents the maximum production od roses with no production of
guns (manufactured goods)
• B represents maximum production of guns with no production of roses
(agricultural goods)
• The curve joining these two extreme points (outward bending, inward
bending or straight line) is the PPC
• The points C and D is attainable point and shows trade-off between 2
goods.
• TRADE OFF: the production of roses can only be expanded by taking
resources away from the production of guns.
• ABCD are the attainable points
• E is the unattainable point
• F us under employment point
22.
23. It is a curve that shows all the maximum possible
combinations of two goods and services which a
country can produce using all of available resources
with efficient technique of production at given state of
technology.
24. Points below, on & beyond PPC
Points on PPC Points below PPC Points beyond PPC
According to figure A,B,C D F E
Attainable Yes Yes No
Desirable Yes No Yes
Employment of
resources
Full employment Under employed -
Productive efficiency Yes No -
Opportunity Cost Yes No -
25. Shifts in PPC
Shift Inwards (Decrease)
Decrease in productive capacity of
a country.
Let’s suppose a that the country is hit
by a tsunami
Shift Outwards (Increase)
Increase in productive capacity of
a country.
Let’s suppose that country A
experiences technological
advancements, or discovery of more
natural resources
27. Causes of shifts in PPC
A change in quantity of
resources
• Land
• Labor
• capital
A change in quality of
resources
• Productivity is efficiency of Factor
of production
• Productivity is defined as output
per unit of input