100% tevredenheidsgarantie Direct beschikbaar na betaling Zowel online als in PDF Je zit nergens aan vast
logo-home
Summary Principles of Economics Lectures 1-12 €6,49   In winkelwagen

Samenvatting

Summary Principles of Economics Lectures 1-12

 13 keer bekeken  1 keer verkocht

Summary of the Principles of Economics course taught in the first year and first semester of the BA International Studies at Leiden University. It contains an extensive summary of lectures 1 to 12, and it includes the graphs.

Voorbeeld 4 van de 81  pagina's

  • 7 april 2022
  • 81
  • 2020/2021
  • Samenvatting
Alle documenten voor dit vak (1)
avatar-seller
evevanberkel
Lecture 1: Introduction to Economics (Ch. 1 & 2)

The Goal of Economics?
- Conservative interpretation = give people the tools to improve their financial status
- Progressive interpretation = for everybody to have their needs met (essentials for life)
- Idealist’s interpretation = not only to have people’s needs met but increase/create wealth
(Dream bigger!)

Economics = Hard science, moving material things (money) around
> Depends on human behaviour → Inflation and recession = cause panic

- Supply is based on the physical presence of goods
- Demand is determined by human behaviour (Biology, greed, desire for statues and variety)
- Economics is where human behaviour meets materiality
- Value is based on demand

- People work for wealth
- Market sends price signals, this tells people how to coordinate labour and capital.

How to Measure Wealth?
- GDP is a measure of things in the economy that goes through a market
- GDP Per Capita tells how wealthy a country is an can be used to compare wealth with
other countries

Economy creates Society
- Old economic thought: Materialism (Marxism)
- New theory: Institutions (politics, society, history) shape the economy

The debate between:
- Keynesianism: Government intervenes to help out poor and middle class, protect from
free trade, and
- Neoliberalism: Government stays out, let the markets work their magic, and there is free
trade

- Microeconomics: Individual industry or market (tends to be more specialized)
> Supply and demand
- Macroeconomics: the general indicators of the health of the economy as a whole
- > Growth, employment, currency, stability, credit markets, productive capacity, Research &
Development (R&D), health of the banking sector, Social and political effects.

Market is a where supply meets demand
Off the grid: non-market action, painting a picture or cooking a fancy meal, not measured in
GDP On-grid- involving money transactions, measured in GDP
- You study to get a better job ( human capital)
- You work ( Facilitates markets)

, - You invest ( Ditto)
- You receive transfer payments (Providing income to spend on markets)
- All of this is measured in GDP= Creating wealth

Supply and Demand Curves
- The X-axis is Q ( quantity)
- The Y-axis is P (price)
Representing the frontier of what is possible for a given market.
Meeting point of X and Y is the equilibrium price
Anything left to the curve can happen, anything to the right is possible




GRAPH: Supply and Demand
S/D (Supply and Demand) curve can show how meddling with the market can cause ‘market failure’
> example:deadweight loss, and inefficiency.

Economists try and find ‘perfect equilibrium’ and minimize wastage
Economists
- Neoliberals (mostly) = don’t admit there is no free market
- “leave markets alone” approach
- Laws always circumscribe markets
- Child labour laws, anti-slavery laws, anti-venality laws, anti-monopoly laws, minimum
wage laws, fiscal policy, all show that what was once sold, is judged by society to
be off limits to the market

Aspects of Microeconomics:
- Supply and Demand > Production Theory > Demand theory
- Elasticity
- Opportunity Cost
- Marginality/Marginal Revenue
- Market Structure: Types of Market
- Corporate Structure/Incentives
- Theory of the Firm
- Game Theory
- Information economics
- Labor Economics & Labor markets
- Labor Laws/Policy

, - Corporate Legislation (can be macro)
- Welfare Economics & Externalities

Aspects of Macroeconomics
- Output/Income
- Employment/Unemployment
- Wage rates
- Fiscal Policy (How much money you tax and where the government spends the
money)
- Trade Policy (Goods allowed to trade by the government)
- Monetary Policy
- Central banks
- Interest rates
- Inflation and deflation
- Banking sector

12 Basic Principles:
1. Choices are necessary because resources are scarce
2. The true cost of something is its opportunity cost
3. ‘How much’ is a decision at the margin
4. People usually respond to incentives
5. There are gains from trade
6. Markets move toward equilibrium
- Meaning: Where their utility is maximized, meet at the most sustainable price, where
everybody is best off, where demand meets supply
- Example: Price for apples too high: reduce price to increase demand
7. Resources should be used efficiently to achieve society’s goals
8. Markets usually lead to efficiency
9. When markets fail government intervention can improve society’s welfare
10. One person’s spending is another person’s income
11. Overall spending sometimes get out of line with the economy’s productive capacity
12. Government policies can change spending

- Economic models = tell us what to expect ( Simplified)


PPF ( Production Possibility Frontier) and Opportunity Cost
- A model for thinking about trade offs facing an economy
- A visual model of scarcity & efficiency
- Simplification: one economy/two goods
- Shows the maximum quantity of one good that can be produced for any given quantity of the
other good, referring to the opportunity cost
- If opportunity costs is not always the same, the graph is not a straight line but is curved
- When line is curved: have to give up different amounts at different times
- If opportunity cost increases then the curve will bow

, - You can produce more when economy grows
- Opportunity Cost: How many X to get so many Y




GRAPH: Production Possibility Frontier (PPF)




GRAPH: PPF




Lecture 2: Models, Graphs, Supply and Demand (Ch 3)

Modelling
Coupling some variables to understand if and how these variables are related and affect each other
when price or quantity changes.
- Y is dependent upon X (They are related and if one changes, the other will also change)
- Example X1 and Y3, if X increases to 2 (X2) Y will also increase to 5 (Y5). The relationship is
1 to 2 ( suhe) = A straight line

Changing slope
Curved line = slope changes: Any point of the curve slope is different, increasing or decreasing
rates of change between 2 valuables ( ; ; relationship for example, different at
any point of the curve)

Voordelen van het kopen van samenvattingen bij Stuvia op een rij:

Verzekerd van kwaliteit door reviews

Verzekerd van kwaliteit door reviews

Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!

Snel en makkelijk kopen

Snel en makkelijk kopen

Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.

Focus op de essentie

Focus op de essentie

Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper evevanberkel. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor €6,49. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 67096 samenvattingen verkocht

Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen

Start met verkopen
€6,49  1x  verkocht
  • (0)
  Kopen