19 January 2016

Fix cost

● A cost that does not charge no matter how much is produced.

         ○ Rent, Mortgage, Insurance.

Variable cost

● A cost that raises or fall depend on how is produce.

         ○ Elasticity 

Marginal cost 

● The of producing one more unit or a goods.

Formulas

Example:

13 January 2016

Elasticity of Demand

• It is a measure of how consumer react react to a change in price.
• Elastic demand: demand that is very sensitive to a change in price.
• E>1, not a necessity, & there sub. 
• Inelastic demand: demand that is very sensitive to a change in price.
• E<1, a necessity, fewer or no sub, people will buy no matter what.
• Unit / Unitary 
• E=1

  Elastic demand                                                   

• Soda
• Steaks
• Candy 
• Fur coats
• Inelastic demand

       ○Gas

       ○Salt

       ○Medicine 

       ○Milk

       ○Toothpaste

Price Elasticity of Demand (PED)

Total Revenue 

●Total amount of money farm receive from selling goods and service.

       ○TR=P×Q

For more information you can watch this video:

https://m.youtube.com/watch?v=4oj_lnj6pXA

7 January 2016

What causes the PPC to shift

1. Advance in technology (outside the graph).
2. Change in resources (inside the graph).
3. Change in the labor force (outside the graph).
4. Economic growth (outside the graph).
5. Natural disaster/warlfamine (inside the graph).
6. More education (inside the graph).

6 January 2016

Factor of production: There resource required to produce goods and services.

Trade-Offs: Alternative that will give up when will choose one cause of action over another.

Opportunity Cost: Its the next best alternative (second or next choice).

Production Possibility Graph: It shows alternative ways to use an economy resources.

Four Assumption of a PPG 1.) Two goods (x, y)
                                           2.)Fixed Resources(land,labor,capital,capital & entrepreneur
                                           3.)Fixed Technology.
                                           4.)Full Employment of resources.

Efficiency: Using resource in such away to maximize the production of goods and services.

Allocative: The production that are being produce are the one most desire by society.

Product Efficiency: Product are being produce in the least costly way.

Under Utilization: Use few resources that an economy is capable of using.

• Point X: Is inside the curve.
• Attainable, but Inefficient.
• Underutilization
• Point A, B, & C: On the curve.
• Attainable and efficient.
• Point Y: Outside of the curve.
• Unattainable

Three type of movement that occur within (PPG)

1. Inside the PPC
2. Along the PPC
3. Shifts of the PPC

5 January 2016

Macroeconomics: It is the study of the economy as a hole.

• International trade
• wage laws
• inflation

Microeconomics: It is the study of individual or specific unit of the economy.

• supply and demand
• market structure
• business organization

Positive economics: It attempt to describle the world as it is.

• it is very descriptive 
• it collect and present fact 
• is consider as ''what is''.

Normative economics: Attempt to prescribe how the world should be.

• it is very descriptive
• opinion

Needs: Basie requirement to survived.

• Food
• H2O (water)
• Shelter
• Clothing

Want: Desires of citizens

Goods: Tangible commodities

1. Capital goods: item used in the creation of order goods.
2. Consumer goods: goods that are intended for final use by the consumer.

Services: Work that is perform for someone.

Scarcity: The most fundamentals economics problem that all society face.

• How to satisfy unlimited wan with limited sources

Shortage: Is a state where quantity demand is greater than quantity supplies.

Factors of production

1. Land: Natural resources
2. Labor: Work source
3. Capital: (A)Human Capital (B)physical Capital
4. Entrepreneurship: (A)Innovation (B)Risk taker