Documentos de Académico
Documentos de Profesional
Documentos de Cultura
• What is Economics?
Gmeee,
Gmeee,
Gmeee
INSATIABLE WANTS + FINITE RESOURCES =
ECONOMISE
"Economic problems arise as the individual or the
community has to make the most efficient use of its limited
resources and is confronted with the problem of choice.
Economics is accordingly concerned with the arrangements
that are made for the use of scarce resources"
L Ruddock, 1992
2.0 Resources
3 types:
1. LAND – all natural resources
medium of exchange
unit of account
a store of wealth
divisible
stable value
Portability
durability
A measure of the wealth of an economy:
The prices of one ‘base’ year are applied to the output of other
years
Construction is an important part of the economy
A 0 34
B 30 32
C 60 28
D 90 23
E 120 16
F 150 7
G 180 0
Resources & technology fixed in short term
F sugar?
150 x
E
120 x
D
90 x
H C
60
x x
B
30 x
A
x
5 10 15 20 25 30
1. What is to be produced?
Produce
Produce
CONSUMERS
Sales & Profit
Produce
Produce
INDUSTRY B
Free Enterprise Economic System
Capitalist Economic System – Key Words
• price mechanism
• profit motive
• consumer sovereignty
Advantages of Capitalist System
Produce
Produce
Produce
Produce
CONSUMERS
Sales & Profit
Produce
Produce
Produce
Produce
ECONOMIC
POLICY CONSUMERS
Sales & Profit
Produce
Produce
ESSENTIAL
GOODS &
Land, labour, Land, labour, Land, labour,
SERVICES
Capital Capital Capital
TAXATION GOVERNMENT
Mixed Economic System
Mixed Economic System – Key Words
• Government intervention
Pro
Pr
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du Pr
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.t Prices set by
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Government
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CONSUMERS
Socialist Economic System – Key Words
• command system
Direct Costs:
• land acquisition Direct Returns:
• building costs • extra production
• planning permission fees • extra sales
• cost of labourers • extra profit
• maintenance costs
• materials costs +
+ Social Benfits:
Social Costs: • increased employment
• increased pollution •More income & wealth
• increased noise
• increased traffic congestion
• unsightly view True Social Costs & Benefits
Cost-Benefit Analysis
Stage 1
The listing of all the relevant costs and benefits attributable to the
project
Stage 2
All cost and benefits are then evaluated so that they can be expressed
as a common monetary value
Stage 3
All cost and benefits are discounted back to the present.
Stage 4
Project appraisal. Finally, the decision-maker needs to assess all the
costs and benefits, and select a project that yields the best increase in
'social welfare', or net social benefit
Cost-Benefit Analysis – Disadvantages