Summary
Summary Parkin
- Course
- Institution
- Book
Samenvatting van het boek Parkin van de hoofdstukken 1, 3, 4, 5, 6, 10, 11, 12, 13, 20, 21, 22, 26, 29 voor het vak Principles of Economics.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
summary of all macro economics chapters
-
Volledige samenvatting van de benodigde stof voor het 1ejaars AMSIB Principles of Economics eindtentamen
-
Summary Economics, ISBN: 9781292147826 International Macroeconomics For Business
2 reviews
By: kerrami99 • 1 year ago
By: jennifervandepol3 • 2 year ago
Seller
Follow
irisdewekker
Reviews received
Content preview
Chapter 1 what is economy?- Scarcity
- Incentive
o Reward to encourage or penalty to discourage
- Economics: social sciences that studies choices
- Microeconomics
o Study of choices of individuals and businesses
- Macroeconomics
o Study of performance of national economy and the global economy
Goods and services
o Objects that people value and produce to satisfy wants
Factors of production (HOW?)
o Land
Natural resources (oil, gas, water, wind, sunshine)
o Labour
Physical and mental efforts of people who work
Human capital: knowledge and skill that people obtain (quality of labour)
o Capital
Tools, instrument, machines, etc to produce goods and services
Financial capital: money, shares, bonds (not a factor of production)
o Entrepreneurship
The human resources that organises labour, land and capital
FOR WHOM?
o Land earns rent
o Labour earns wages
o Capital earns interest
o Entrepreneurship earns profit
- Self-interest
o A choice that is best for you
- Social interest
o An outcome that is best for society as a whole
- Efficient
o When a situation can’t be improved upon
o Resource use is efficient if it is not possible to make someone better off without
making someone else worse off
- Fairness and social interest examples:
o Globalisation
o The information-age monopolies
o Climate change
o Financial instability
The economic way of thinking:
Trade-off
o An exchange: giving up something in exchange for something else
Rational choice
Benefit
, Preferences: the intensity of a person’s likes and dislikes
Opportunity cost: the highest-valued alternative that must be given up
Margin
o Marginal benefit: the benefit that arises from an increase in an activity
o Marginal cost: the opportunity cost of an increase in an activity
Incentive
- Positive statements
o What is
o Might be right or wrong
o Can be tested by checking facts
- Normative statement
o What ought to be
o You may agree or disagree
- Economic model
o Is a description of some aspects of the economic world that includes only those
features that are needed for the purpose at hand
o To answer positive statements
Graphs used in economic models
Variables move in the same direction
o Positive or direct relationship
o Linear relationship; straight line
Variables move in opposite direction
o Negative or inverse relationship
o Linear relationship (downwards)
Variables have a maximum or a minimum
o Toppen en dalen
Variables are unrelated
The slope of a relationship
Δy
-
Δx
- Slope of a curved line:
o Calculate the slope at a point on a curve
Draw a straight line over one point
o Calculate the slope across an arc (piece of curve)
Calculate the difference between 2 point on the arc
Graphing relationship among more than 2 variable
Ceteris paribus (cet. par.)
o If all other relevant things remain the same
o When the whole curve shifts in the graph
,Equations of straight lines
o y=a+bx
o y 1 +∆ y=a+b (x1 + ∆ x )
o b=the slope
Chapter 3 demand and supply
- Competitive market: a market that has many buyers and sellers
- Money price: the price of an object
- Relative price: the ratio of one price to another and it is an opportunity cost
Demand
Demand reflects a decision about which wants to satisfy
Quantity demanded
o The amount that consumers plan to buy during a given time period at a particular
price
o Measured as an amount per unit of time
Law of demand
o Other things remaining the same, the higher the price of a good, the smaller is the
quantity demanded; and the lower the price of a good, the greater is the quantity
demanded
Why does a higher price reduce the quantity demanded?
o Substitution effect
As the opportunity cost of a good rises, people buy less of that good and
more of its substitutes
o Income effect
With a higher price and unchanged income, people cannot afford to buy all
the things they previously bought
- Demand
o The entire relationship between the price of the good and the quantity demanded of
the good
- Quantity demanded
o Refers to a point on a demand curve – the quantity demanded at a particular price
- Demand curve
o Shows the relationship between the quantity demanded of a good and its price when
all other influences on consumers’ planned purchases remain the same
- Demand schedule
o A list of the quantity demanded at each price
- Willingness-and-ability-to-pay curve = demand curve = marginal benefit curve
o A measure of marginal benefit
- Change in demand are caused by:
o Prices of related goods
Substitutes: depends on prices of substitutes
Complement: a good that is used in conjunction with another good
o Expected future prices
o Income
Normal good: one for which demand increases as income increases
Inferior good: one for which demand decreases as income increases
o Expected future income or credit
, o Population
The larger the population, the greater the demand
o Preferences
- Change in the quantity demanded
o A movement along the demand curve
o Or a shift of the demand curve
Supply
Quantity supplied
o The amount that producers plan to sell during a given time period at a particular
price
o Measured as an amount per unit of time
Law of supply
o Other things remaining the same, the higher the price of a good, the greater is the
quantity supplied; and the lower the price of a good, the smaller is the quantity
supplied
Supply
o The entire relationship between the quantity supplied and the price of a good
Quantity supplied
o Refers to a point on a supply curve – the quantity supplied at a particular price
Supply curve
o Shows the relationship between the quantity supplied and its price when all other
influences on producers’ planned sales remain the same
The supply curve is a graph of a supply schedule
Minimum-supply-price curve = supply curve = marginal cost curve
o The lowest price at which someone is willing to sell another unit
o This lowest price is marginal cost
Change in supply is caused by:
o Prices of factors of production
o Prices of related goods produced
Substitutes in production
Complements in production
o Expected future prices
o Number of suppliers
o Technology
o The state of nature
All the natural forces that influence production
A movement along the supply curve shows a change in the quantity supplied
A shift of the supply curve shows a change in supply
Market equilibrium
- Equilibrium is a situation in which opposing forces balance each other
- Equilibrium price
o The price at which the quantity demanded equals the quantity supplied
- Equilibrium quantity
o The quantity bought and sold at the equilibrium price
- A market moves towards its equilibrium because:
o Price regulates buying and selling plans
o Price adjusts when plans don’t match
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller irisdewekker. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.31. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now