The document provides an overview of principles of economics. It defines key economic concepts like scarcity, choice, rational self-interest and incentives. It explains that economics studies how society manages scarce resources and that individuals make choices that maximize their benefit given constraints. It also distinguishes between microeconomics, which examines individual parts of the economy, and macroeconomics, which looks at the whole economy.
Just an extension to the demand theory for ISC economics, this chapter discusses consumer equilibrium with utility approach. Especially when goods are free, priced and two commodity case.
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C:\Documents And Settings\Control\My Documents\Principles Of Economics By Amir Alagab
1. Principles of Economics By. Amir Alagab A.Gadir GC University By Amir A.A.GADIR . Int. Capacity Building Trainer Cell phone + 249 908580182 e-mail : [email_address] bsacooba@gmail.com Next
2. Where this Word “ Economics ’’ come from? By Amir A.A.GADIR . Int. Capacity Building Trainer The term economics comes from the Ancient Greek “oikonomia” which means "management of a household, administration. Oik House O CV nomia Management Next
3. What is Economics? By Amir A.A.GADIR . Int. Capacity Building Trainer Products Service Distribution Consumption Next
4. Economics – Definitions Economics is the study of how scarce resources are allocated among unlimited wants. Adam Smith The branch of social science that deals with the production and distribution and consumption of goods and services and their management. Wikipedia Economics is the study of how society manages its scarce resources. N.G. Mankiw By Amir A.A.GADIR . Int. Capacity Building Trainer
5. To understand this definition, we must examine the concepts of scarcity , economic choice , and rational self-interest. By Amir A.A.GADIR . Int. Capacity Building Trainer Concepts Next
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14. 11 By Amir A.A.GADIR . Int. Capacity Building Trainer Resource Suppliers land labor capital rent wages interest Producers of Goods Next
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19. Economics 16 By Amir A.A.GADIR . Int. Capacity Building Trainer
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21. 18 By Amir A.A.GADIR . Int. Capacity Building Trainer End of Lecturer One
22. Lecture 2 SUPPLY AND DEMAND I: HOW MARKETS WORK The Market Forces of Supply and Demand
23. 19 By Amir A.A.GADIR . Int. Capacity Building Trainer The Economic Problem is the Problem of 1. [Scarcity ] Here we mean the Proportional Scarcity not the Absolute Scarcity ,resources are available but due to the increasing needs for it ,thus resources become scarce for its needs. Next
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28. 1. What we Produce ? What type of goods and services we produce is it food , clothes or tools . 23 By Amir A.A.GADIR . Int. Capacity Building Trainer 2. How we Produce ? Here we need to specify the technique we use in production of these goods. 3. To Whom we produce ? The distribution technique by which production delivered within the community and specifying consumers .
29. Lecture 2 SUPPLY AND DEMAND I: HOW MARKETS WORK Graphs and Their Meaning Price of Ice-Cream Cone 2.50 2.00 1.50 1.00 0.50 $3.00 0 1 2 3 4 5 6 7 8 9 10 11 Quantity of Ice-Cream Cones 12 1. A decrease in price ... 2. ... increases quantity of cones demanded.
30. 24 By Amir A.A.GADIR . Int. Capacity Building Trainer Graphs are employed to help students visualize and understand important economic relationship. Graphs are a means by which ecnomists express their theories . Definition Graph: What is it ?
31. 25 By Amir A.A.GADIR . Int. Capacity Building Trainer Graph Construction It's a rpresentation of relationship between to variables. Graph is consist of Horizontal line called X Axis and Vertical line called Y Axis The Original Point is the point where two lines meet usually equal Zero. Next
32. 26 By Amir A.A.GADIR . Int. Capacity Building Trainer Y Axis X Axis Original Point
33. 27 By Amir A.A.GADIR . Int. Capacity Building Trainer Graph Determining Factors Determining Factor , Represents on horizontal axis { X Axis }. Dependent Factor , Represents on vertical axis { Y Axis }. Representing the independent variable on the horizontal axis and dependent variable on the vertical axis Next
34. 28 By Amir A.A.GADIR . Int. Capacity Building Trainer Direct Relationship Example. 1. Table.1 Next E 150 200 D 120 1600 C 90 1200 B 60 800 A 30 400 Petrol Consumption per million Ltr.{ X } Total No of Cars { Y }
35. 28 By Amir A.A.GADIR . Int. Capacity Building Trainer Direct Relationship Example. 1. Table.1 400 800 1200 1600 200 Y Axis Cars Total No petrol Consumption per million Ltr. X Axis Next 30 60 90 120 150
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37. 28 By Amir A.A.GADIR . Int. Capacity Building Trainer Inverse Relationship Example. 2. Table.2 Next E 5 10 D 10 8 C 15 6 B 20 4 A 25 2 P Q
38. 28 By Amir A.A.GADIR . Int. Capacity Building Trainer Consier table 2 which shows the realtionship between the demand of chicken and its price per kg . Inverse Relationship we observe a negative or inverse reationship between chicken demanded quantity and its price these 2 variables change in opposite direction . Next
39. 28 By Amir A.A.GADIR . Int. Capacity Building Trainer Inverse Relationship Example. 2. Table.2 2 4 6 8 10 10 15 20 25 Y Axis Price per 100 gk Chicken Demanded Quantity. X Axis Next
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41. Any Questions? By Amir A.A.GADIR . Int. Capacity Building Trainer Next
42. Thank You! By Amir A.A.GADIR . Int. Capacity Building Trainer Next
43. 18 By Amir A.A.GADIR . Int. Capacity Building Trainer End of Lecturer 2
44. Lecture 4 SUPPLY AND DEMAND I: HOW MARKETS WORK The Market Forces of Supply and Demand
45. Definition Market is an institution or a mechanism which brings together Buyers " Demanders " and Sellers " Suppliers " of a particular goods and services. What is market?
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47. Types of Markets 1. Perfect Competition: In this market there are 4 main factors : # Numerous buyers and sellers: Here the firm is a price taker so that each has no influence over price
48. # Product are the same" Homogeneous": Hers the products are similar enabling easy substituting one another. e.g. hair cutting service. # Freedom entry and exit : This market has no restriction or barriers facing a new firm to enter this market. Types of Markets
49. # Information and access to the data: The competitors must have an easy way to get the required information about how this market work and operate. Types of Markets
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51. Types of Markets 4. Oligopoly : Few sellers or producers. No aggressive competition . e.g Sugar manufacturing .
52. Any Questions? By Amir A.A.GADIR . Int. Capacity Building Trainer Next
53. Thank You! By Amir A.A.GADIR . Int. Capacity Building Trainer Next
54. 18 By Amir A.A.GADIR . Int. Capacity Building Trainer End of Lecturer 3
57. Demand Quantity demanded is the amount of a good that buyers are willing and able to purchase in different market price levels . What is demand?
58. Demand There are many factors which affect the demand the quantities that consumers willing to buy at a certain time and certain level of price such as: Factors Determine Demand
59. Demand 1.Nmber of Buyers 2. Consumer Income 3. Testes 4. Prices of related goods 5. Consumer expectations Factors Determine Demand
60. Demand Law of Demand The law of demand states that, other things equal, the quantity demanded of a good falls when the price of the good rises. The demand curve slopes downward because, ceteris paribus , lower prices imply a greater quantity demanded!
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62. Demand Demand Schedule 2 500 E 0 550 F 4 450 D 6 400 C 8 350 B 10 300 A Quantity / week Price/kg/Sdg Point
63. Demand Demand Curve The demand curve is a graph of the relationship between the price of a good and the quantity demanded. ( DD – Sloping top to down backward )
65. Demand Change in Demand and Quantity demanded The quantity which consumers are willing and able to buy rely on other factors e.g.
66. Demand Demand Curve 1.Nmber of Buyers 2. Consumer Income 3. Testes 4. Prices of related goods 5. Consumer expectations
67. Demand Change in Consumer Income If the income increased in concern the buy ability will increase for ordinary goods, the demand cure will move to right
68. Consumer Income Normal Good SDG3.00 2.50 2.00 1.50 1.00 0.50 2 1 3 4 5 6 7 8 9 10 12 11 Price of Ice-Cream Quantity of Ice-Cream 0 Increase in demand An increase in income... D 1 D 2 Demand
69. Consumer Income Inferior Good Sdg3.00 2.50 2.00 1.50 1.00 0.50 2 1 3 4 5 6 7 8 9 10 12 11 Price of Ice-Cream Quantity of Ice-Cream 0 Decrease in demand An increase in income... D 1 D 2 Demand
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71. Changes in Quantity Demanded- Substitutes 0 D 1 Price of Toyota Cars. Quantity of Hyundai Cars Raises the price of Toyota Cars results in an increase in demand for Hyundai cars. 8 1000 $2000 12 D 2 4
72. Any Questions? By Amir A.A.GADIR . Int. Capacity Building Trainer Next
73. 18 By Amir A.A.GADIR . Int. Capacity Building Trainer End of Lecturer 4
74. Demand Function: Q d = f ( P , P n , I, N… ) Qd : Quantity demanded P : Price P n : Other goods price I : Consumer Income N : Number of consumers or Population
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77. Lecture 5 Supply , Demand and Equilibrium I Demand
78. Supply What is supply? Supply is the number of units of a product / Service that a firm would be willing and able to offer for sale at a particular price during a given time period.
79. Supply Supply Schedule A supply schedule is a table showing how much of a product firms will supply at different prices.
80. Supply Supply Schedule Wheat flour Production 45 4 E 45 5 F 30 3 D 20 2.25 C 10 1.75 B 0 2 A Quantity / Annuel Price/ton/Sdg Point
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82. The Law of Supply 0 1 2 3 4 5 6 0 10 20 30 40 50 Millions ton of Wheat produced per year Price of wheat per ton (sdg)
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88. Any Questions? By Amir A.A.GADIR . Int. Capacity Building Trainer Next
89. Thank You! By Amir A.A.GADIR . Int. Capacity Building Trainer Next
90. 18 By Amir A.A.GADIR . Int. Capacity Building Trainer End of Lecturer 5
Editor's Notes
17 Use the cookie or snack example to illustrate individual and market demand.