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1、西方经济学ECONOMICS,ECONOMICS,参考书：Paul A.Samuelson,William D.NordhausEconomics,18 EditionThe McGraw-Hill Companies,Inc.2005中国人民邮电出版社,ECONOMICS,Unit 1:Nature and scope of economics Unit 2:Theory of demand Unit 3:Theory of supply Unit 4:Price determination Unit 5:Elasticity of demand Unit 6:Price elasticit
2、y of supply Unit 7:Economies of large scale production and existence of small firmsUnit 8:Production cost Unit 9:Perfect Competition Unit 10:Monopoly Unit 11:Monopolistic competition,ECONOMICS,Unit 12:OligopolyUnit 13:Consumer price index-CPIUnit 14:Central bank-monetary policy Unit 15:InflationUnit
3、 16:UnemploymentUnit 17:Role of government _ fiscal policy Unit 18:National income accountingUnit 19:National income application-standard of livingUnit 20:Keynes theory of income and employmentUnit 21:International tradeUnit 22:Free trade and protection,Nature and scope of economics,1.1 What is Econ
4、omics?1.2 Various Definitions of Economics1.3 Branches of EconomicsMicroeconomicsMacroeconomics1.4 The Basic Economic Problems1.5 Concept of Opportunity Cost1.6 Production Possibility Curve(PPC)1.7 Review Questions,1.1 What is Economics?,Everywhere human beings are found to make efforts and earn mon
5、ey and then spend this money to satisfy their wants.Therefore,the activities concerning the earning and spending of wealth are studied under Economics.(Eco.),1.2 Various Definitions of Economics,Adam Smith Economics is a study of an enquiry into the nature and causes of wealth of nations.J.S.Mills E
6、conomics is a study of the practical science of the production and distribution of wealth.L.Robbins Economics is a science which studies human behaviour as a relationship between end and scarce means which have alternative uses.,1.2 Various Definitions of Economics,Richard Lipsey:Modern eco.concerns
7、:-a)The allocation of a societys resources among alternative uses and the distribution of the societys output among individuals and group.b)The ways in which production and distribution changes over time.c)The efficient and inefficiencies of economic systems.,1.2 Various Definitions of Economics,Gen
8、eral DefinitionEconomics is a study of how people allocate their limited resources such as land,labour and capital to provide for their unlimited wants.,Microeconomics,Microeconomics studies the economic decision making of firms and individuals in a market setting.,Microeconomics,The issues that are
9、 studied under Microeconomic analysis are:a)How consumers behave.b)How business firms make choices.c)How prices are determined in the markets.d)How taxes and price controls affect consumers and producers.e)How the structure of markets affect economic performance.f)How wages,interest rates,rent and p
10、rofits are determined.g)How income is distributed among families.,Macroeconomics,Macroeconomics is a study of economy as a whole and it concerns the relationship among aggregate(total)measures.,Macroeconomics,The issues that are studied under macroeconomic analysis are:a)National Income.b)Nations mo
11、ney supply and money demand.c)The value of money.d)Inflation and its determinants.e)Macroeconomic objectives such as price stability,full employment,Balance of Payments and Economic growth.f)Government policies(e.g.Monetary and Fiscal Policies).g)Public Finance(e.g.Government revenue and expenditure
12、).,1.4 The Basic Economic Problems,In an economy,people have unlimited desire for goods and services(g&s),i.e.unlimited wants,but the resources in the world are limited and so we cannot satisfy all our wants and are forced to choose as to which goods to produce.Therefore,scarcity and choice or limit
13、ed resources and unlimited wants sum up the basic economic problem.Choice is determined by:i.Scale of preference ii.Opportunity cost,1.4 The Basic Economic Problems,We can summarise this idea into the following figure:,1.4 The Basic Economic Problems,As we are faced with the problem of scarcity,ther
14、e are 3 important economic decisions to be considered.i)What goods&services to be produced and in what quantity i.e.how much to be produced?This concerns with the allocation of scarce resources among alternative uses.ii)How or by what method goods&services should be produced?This concerns with choos
15、ing the most efficient method of production.iii)For whom are goods&services to be produced,i.e.who are to enjoy the goods&services produced?This concerns with the distribution of such goods&services.,1.5 Concept of Opportunity Cost,Opportunity cost of satisfying a want is the next best alternative t
16、hat has to be forgone,(i.e.the cost of giving up something in order to obtain something else.),1.5 Concept of Opportunity Cost,1.5 Concept of Opportunity Cost,1.5 Concept of Opportunity Cost,E.g.A person has$5 and he can spend on chocolate or chewing gum or a combination of both.Price of a bar of ch
17、ocolate=$0.50 Price of a bar of chewing gum=$0.20Chocolate Chewing gum 10 0 8 5 6 10 4 15 2 20 0 25,1.5 Concept of Opportunity Cost,There are 6 attainable combinations available to him using all his money.Assuming that he is consuming 6 bars of chocolate and 10 bars of chewing gum,the opportunity co
18、st of the 8th bar of chocolate is what he must give up in order to get that 8th bar,which in this case is 5 bars of chewing gum.(10-5)The line on the above diagram shows a constant opportunity cost of consuming 2 additional bars of chocolate is 5 bars of chewing gum.Opportunity cost is represented b
19、y the slope of that line.,1.6 Production Possibility Curve(PPC),Production Possibility curve is defined as the curve that shows the greatest possible quantities of goods that can be produced with the available resources at a given level of technology.Example:Combination Consumption goods Investment
20、goods A 650 0 B 640 1.0 C 510 3.6 D 410 4.6 E 100 5.2 F 0 5.3,1.6 Production Possibility Curve(PPC),All combinations on or inside the PPC are attainable while those combinations outside the PPC are unattainable presently,given the resources and the level of technology.However,combinations of goods i
21、nside the PPC imply that resources are not fully utilised or employed.,1.7 Review Questions,1.The problem of scarcity requires certain economic decisions to be considered.What are these decisions?2.Define and explain,with examples,the following economic concepts:a.Opportunity Cost b.Production Possi
22、bility Curve,Theory of demand,2.1 Definition 2.2 Law of Demand2.3 Individual Demand Schedule and Curve2.4 Market Demand Schedule and Curve2.5 A Change in Quantity Demanded and a Change in Demand 2.6 Factors which Cause the Demand Curve to Shift2.7 Review Questions,2.1 Definition,Demand refers to the
23、 range of quantities of a commodity,which a consumer is willing and able to buy at different price levels at a given time.,2.2 Law of Demand,If all other things remain constant(ceteris paribus),the higher the price,the lower will be the quantity demanded and vice versa.,2.3 Individual Demand Schedul
24、e and Curve,The table below is the demand schedule,which lists the quantity of a commodity that would be demanded at various price levels with a given income.It shows the relationship between quantity demanded and price.,2.3 Individual Demand Schedule and Curve,The demand curve is a graphical repres
25、entation of the data in the demand schedule.It slopes downwards from left to right indicating that the quantity demanded increases as the price falls.,2.4 Market Demand Schedule and Curve,Market demand is the total demand of all the consumers for a particular good.It can also be derived by the later
26、al summation of the consumers demand curves.,2.4 Market Demand Schedule and Curve,2.5 A Change in Quantity Demanded and a Change in Demand,A change in quantity demanded is a movement along the demand curve.This is brought about by changes in the price of the good.A change in demand is the shift of t
27、he demand curve.Thus,an increase or decrease in demand means that greater or smaller quantity is purchased at the same price.This shift of the demand curve results from a change in any of the determinants of demand.,2.5 A Change in Quantity Demanded and a Change in Demand,2.6 Factors which Cause the
28、 Demand Curve to Shift,a)Tastes and PreferencesConsumers tastes and preferences change over time.They may be influenced by factors like age,education and advertisements.b)IncomeAn increase(or decrease)in income would usually lead to more(or less)of a good being bought.c)Future ExpectationsIf consume
29、rs expect prices to rise in the future,they would buy more of the goods in order to avoid paying more in future.However,if they expect prices to fall,they would check their consumption.,2.6 Factors which Cause the Demand Curve to Shift,d)Changes in PopulationChanges in the size and structure of popu
30、lation would affect demand.Generally,an increase in population would lead to an increase in demand.e)Prices of Other GoodsComplements:coffee and sugar.If price of coffee falls,more coffee would be bought.This would lead to an increase in demand for sugar.Substitutes:butter and margarine.If the price
31、 of margarine falls,consumers would shift their demand from butter to margarine,which is cheaper now.f)Government PoliciesIf the government introduces new taxes or increases existing tax rate,the taxpayers incomes would fall,thus reducing their demand for goods.,2.7 Review Questions,1.Distinguish ch
32、ange in quantity demanded from change in demand.2.What factors will cause the demand curve to shift right?,Theory of supply,3.1 Definition 3.2 Law of Supply Definition3.3 Individual Supply Schedule and Curve3.4 Market Supply Curve3.5 Distinction between Movement along Supply Curve and Shift of the S
33、upply Curve3.6 Factors which cause the Supply Curve to Shift3.7 Review Questions,3.1 Definition,Supply refers to the quantity of a commodity that is offered for sale at a given price and at a particular point of time.,3.2 Law of Supply Definition,If all other things remain constant(ceteris paribus),
34、the higher the price,the greater will be the quantity supplied and vice versa.,3.3 Individual Supply Schedule and Curve,Supply schedule shows the relationship between quantity supplied of a good and the different price level of that good.Supply curve is a graphical representation of the supply sched
35、ule.,3.3 Individual Supply Schedule and Curve,3.4 Market Supply Curve,Market Supply refers to the total supply of a particular commodity by all the producers at a point of time.It is adding horizontally,all the individual supply curves at each different price level.,3.5 Distinction between Movement
36、along Supply Curve and Shift of the Supply Curve,a)Movement Along Supply CurveIt is also known as a change in quantity supplied as a result of a change in the price of the commodity,all other factors remain constant.,3.5 Distinction between Movement along Supply Curve and Shift of the Supply Curve,b
37、)Shift of the Supply CurveIt is also known as a change in supply as a result of a change in the conditions of supply while the price of that commodity remain unchanged.,3.6 Factors which cause the Supply Curve to Shift,a)Natural CalamitiesAny natural calamities such as earthquakes,flood,drought etc.
38、will reduce supply and hence will shift supply curve to the left.b)Cost of ProductionAny changes in the cost of production as a result of any changes in the price of factor input will shift the supply curve.c)State of TechnologyAdvancement in technology will certainly reduce the cost of production a
39、nd hence will increase output by shifting supply to the right.d)Government PoliciesIntroduction of indirect taxes or subsidies will affect the cost of production and hence will shift the supply curve.e)Economic and Political StabilityAn economic recession or political unrest will result in suppliers
40、 being uncertain about the market demand and their business conditions.Therefore,their supply may contract.,3.7 Review Questions,1.Distinguish change in quantity supplied from change in supply.2.What factors will cause the supply curve to shift left?,Price determination,4.1 Definition4.2 Effect on t
41、he Equilibrium Price and Quantity4.2.1 When Conditions of Demand Changed(With Supply Unchanged)4.2.2 When Conditions of Supply Changed(With Demand Unchanged)4.2.3 When Both Conditions of Demand and Supply Changed4.2.4 When Government Imposes an Indirect Tax4.2.5 When Government Provides Subsidy to P
42、roducers4.3 Price Control 4.3.1 Price Ceiling4.3.2 Price Floor4.4 Review Questions,4.1 Definition,Equilibrium price arises when all the goods in the market will be cleared at that price.Equilibrium quantity arises when what is being brought to the market by the seller is being bought by the consumer
43、s at the equilibrium price.,4.1 Definition,4.2.1 When Conditions of Demand Changed(With Supply Unchanged),If there is a change in the condition of demand that cause the demand curve to shift to the left,there will be a new equilibrium price and quantity as shown in diagram(i)below.,4.2.2 When Condit
44、ions of Supply Changed(With Demand Unchanged),If there is a change in the condition of supply that cause it to shift to the left,this will result in a new equilibrium price and quantity as shown in diagram(ii)below.,4.2.3 When Both Conditions of Demand and Supply Changed,If there are changes in both
45、 the conditions of demand and supply,then the equilibrium price and quantity can only be determined provided we know:The directions of the shift(left or right)-The magnitude(distance)of the shift-The elasticity(slope)of both demand and supply curves,4.2.4 When Government Imposes an Indirect Tax,The
46、imposition of an indirect tax will reduce the amount that firms are prepared to supply at each different price level.The effects can be shown below.,4.2.4 When Government Imposes an Indirect Tax,4.2.5 When Government Provides Subsidy to Producers,Subsidy is a form of aid that will reduce the cost of
47、 production and hence will increase the supply of the good or service at each different price level.The effects can be shown below.,4.2.5 When Government Provides Subsidy to Producers,4.3.1 Price Ceiling,Definition:It is the highest price that producers are allowed to charge on the goods or services
48、 provided.Purpose of implementation To encourage the consumption of certain goods To lower the cost of living To protect low income earners,4.3.1 Price Ceiling,From the diagram above:-Controlled price would now be lower There will be a shortage where quantity demanded exceeds quantity supplied Black
49、 market may develop as some consumers may be willing to pay a price higher than the controlled price to obtain the goods,4.3.2 Price Floor,Definition:It is the lowest price that a particular good or service can be purchased.Purpose of implementation Protect workers who have weak bargaining power Dis
50、courage the consumption of certain goods,4.3.2 Price Floor,From the diagram above:-Controlled price would now be higher There will be a surplus where quantity supplied exceeds quantity demanded Unemployment may increase,4.4 Review Questions,1.Explain how prices are determined.2.How would the followi
