igcse經(jīng)濟學(xué)課件(英文版)

1、IGCSE®/O Level Economics,1.1 The basic economic problem,S1,Factors of production,Natural resources = landMan-made resources = capitalHuman skills and effort = labourBusiness know-how = enterprise,Production,Using

2、 inputs (resources) to make outputs (goods and services) to satisfy the needs and wants of consumers,Consumption,Using up goods and services (products) to satisfy consumers’ needs and wants,The basic economic problem,Hum

3、an wants are unlimited but resources are scarce,So, we all have to make choices,,There is a limited amount of resources such as raw materials, machines, factories and skilled workers. But there are a number of different

4、ways in which they can be used.,,Resource allocation therefore involves deciding how best to use scarce resources to satisfy as many needs and wants as possible,,,CHOICE,CHOICE,Choice,Similarly, people and governments on

5、ly have a limited amount of money but have many needs and wants to satisfy,$100,,,,Food? Entertainment? Clothing?,Defence? H

6、ealth care? Roads?,,,,$100bn,Opportunity cost,Opportunity cost is the cost of choice What would you buy with US$10?How should the government spend US$250 million? (Or, shoul

7、d the government cut taxes by US$250 million?)What occupation will you choose when you finish your studies?How should a new business invest US$20 million?Should we conserve more natural resources? … and what ar

8、e the next best alternatives foregone?,Production possibility curves,,A firm producing cars and trucksWhat is the opportunity cost of producing 20 more trucks?,,An economy producing consumer goods and capital goods Wha

9、t is the opportunity cost of producing 15 more tonnes of consumer goods?,,Production possibility curves,Production possibility curves,Production possibility curves (PPCs) show the maximum combined output of two or more p

10、roducts a firm or an entire economy can produce with its available resourcesResources are being used efficiently if they are producing their maximum outputBut, because resources are limited, producing more of one pro

11、duct means producing less of another PPCs are therefore a useful way of showing the opportunity cost of producing more of one product in terms of how much of another must be given up,IGCSE®/O Level Economics,2.1 E

12、conomic systems,S2,Resource allocation,Because productive resources are scarce relative to human wants we must decide:,Economic systems,Who in an economy decides what goods and services to produce, how to produce them an

13、d who to produce them for, and how are these decisions are made?,Economic systems,,,China Cuba,,North Korea,,DenmarkFranceItalySwedenUKMany developed economies,,ArgentinaMauritiusNepalParaguay,,BahamasSingapore

14、,,The market economic system,,,,,,Private sector producers,,Consumers,Goods and services,Money,Production,Exchange,Consumption,In a free market economic system all decisions are taken by private sector organizations and

15、individuals. There is little or no role for government or a public sector and therefore little or no taxation or public spending.,,,The price mechanism,,A market is any set of arrangements that brings together all the pr

16、oducers and consumers of a good or service so that they can engage in exchange.,Private firms produce goods and services to maximize their profits,Consumers consume goods and services to maximize their utility (satisfact

17、ion),As consumer demand for a product rises,,Production becomes more profitable, so producers increase output,,Production becomes less profitable, so producers reduce output,,,Market price and quantity traded,MARKET PRIC

18、E RISES,MARKET PRICE FALLS,As consumer demand for a product falls,What’s good about the market system?,,A wide variety of goods and services will be produced to satisfy consumer wantsFirms respond quickly to changes in

19、consumer wants and spending patternsThe profit motive of firms encourages them to develop new products and use the most efficient methods of productionThere are no taxes,,,Profits can be increased by increasing sales a

20、nd/or reducing costs of production,If consumer demand is rising, prices will rise and production becomes more profitable. Entrepreneurs will allocate resources to their most profitable uses,,There is no public sector in

21、 a totally free market economic system,,How the market system can fail,,Market failure: when free markets fail to produce goods and services that are worthwhile or when the decisions of producers or consumers result in

22、wasteful or harmful activities,,NATIONAL PARK,,How the market system can fail,,Market failure: when free markets fail to produce goods and services that are worthwhile or when the decisions of producers or consumers resu

23、lt in wasteful or harmful activities,,,,The mixed economic system,,In a mixed economy a government can intervene in different markets in an attempt to correct the worst market failures:It can provide useful and essentia

24、l goods and servicesIt can provide goods and services for people in the greatest needIt can employ people in public sector organizations and provide financial support to private sector firms to boost output and employm

25、entIt can outlaw the production of harmful goods and dangerous activitiesIt can outlaw business practices that restrict competition or mislead consumers,The mixed economic system,,A mixed economy therefore combines the

26、 advantages of a market economic system with:,,How mixed?,,Government intervention: some problems,,By correcting failures in some markets, a government may distort the allocation of resources and cause problems in other

27、s: High taxes on people and firms can distort market price signals and reduce work incentives Land regulations can increase production costs and therefore reduce the profitability and supply of some goods and services

28、 Public sector organizations may be inefficient and produce poor-quality goods and services because they do not have to make a profit Some government spending may be for political or even personal gain,IGCSE®/O Lev

29、el Economics,2.2 How markets work,S3,,,What is a market?,The market for a good or service consists of all those producers willing and able to supply it and all those consumers willing and able to demand it,demand goods a

30、nd services to satisfy their needs and wants,supply goods and services to earn profits,How many fizzy drinks?,If cans were $5 each,Many producers Few consumers,If cans were 10 cents each,Few producers Many consu

31、mers,Demand,The want or willingness of consumers to buy a productTo be an effective demand a consumer must have enough money to buy the productAs price rises, the quantity demanded by consumers contractsAs price falls

32、, the quantity demanded by consumers extendsA demand curve slopes downwards,Substitutes and complements,Substitutes can satisfy the same want,Complements are in joint demand,or,or,or,Market demand,The sum of all individ

33、ual consumer demands for a particular product,A rise in demandThe market demand curve shifts outwards Possible causes are:an increase in disposable incomes after taxa rise in the price of substitutesa fall in the pr

34、ice of a complement tastes and fashion favour the productan increase in advertisinga rise in the populationother factors, e.g. hot weather increases demand for cold drinks and sun creams,Market demand,The sum of all

35、individual consumer demands for a particular product,A fall in demandThe market demand curve shifts inwards Possible causes are:a fall in disposable incomes after taxa fall in the price of substitutesa rise in the p

36、rice of a complement tastes and fashion favour other productsa reduction in advertisinga fall in the populationother factors, e.g. hot weather reduces the demand for winder coats,No, if the product is an inferior goo

37、d As income rises, consumers buy less as they switch their demand to other more preferable products,Yes, if the product is a normal good As income rises, consumers are willing and able to buy more,Income and demand,But

38、 will a rise in consumer income always lead to an increase in demand for a product?,,,,,Supply,The willingness and ability of firms to make a product available to consumers As price rises, the quantity supplied by produ

39、cers extends because production becomes more profitableAs price falls, the quantity supplied by producers contracts because production becomes less profitableA supply curve slopes upwards,Market supply,The sum of all i

40、ndividual producers’ decisions about the supply of a particular product,A rise in supplyThe market supply curve shifts outwards Possible causes are:other products become less profitable to producea fall in the cost o

41、f factors of productionan increase in the supply of resourcestechnical progress and improvements in production processes and machineryan increase in business optimism and expectations of profitthe government subsidiz

42、es production and/or cuts taxes on profitsother factors, e.g. good weather boosts crop harvests,Market supply,A fall in supplyThe market supply curve shifts inwards Possible causes are:other products become more prof

43、itable to producea rise in the cost of factors of productiona fall in the supply of resourcestechnical failures, such as a cut in power supplies or mechanical breakdownsa fall in business optimism and profit expectat

44、ionsthe government withdraws subsidies and/or increases taxes on profitsother factors, e.g. wars and natural disasters,The sum of all individual producers’ decisions about the supply of a particular product,Market equi

45、librium,,,,,Price per unit,Quantity traded per period,D,D,S,S,,,Equilibrium quantity traded (Qe),Market price (Pe),0,A market is in equilibrium where market demand equals market supplyAt the equilibrium market p

46、rice the quantity consumers wish to buy is exactly equal to the quantity producers wish to sellIf a market is in equilibrium there are no pressures to change the market price,Market disequilibrium,,,,,Price per unit,Qu

47、antity traded per period,D,D,S,S,,Pe,0,A market is in disequilibrium if the quantity consumers wish to buy is not matched by the quantity producers wish to sell,,,P1,P2,,,,At price P1 there is an excess supply. Price wil

48、l need to fall to persuade consumers to buy more and for producers to contract their supply.,At price P2 there is an excess demand. Price will need to rise to reduce consumer demand and to encourage producers to supply m

49、ore.,An increase in market price,If market demand rises OR If market supply falls,,,,,,,,,,,Price per unit,Quantity traded,,0,D,S,D,D1,D1,S,P1,P,Q,Q1,,,,,,,,,,,,Quantity traded,0,D,S,D,S

50、,P1,Q1,Q,,,Price per unit,,S1,S1,,P,A decrease in market price,If market demand falls OR If market supply rises,,,,,,,,,,,Price per unit,Quantity traded,,0,D1,S,D1,D,D,S,P,P1,Q1,Q,,,,,,,

51、,,,,,Quantity traded,0,D,S1,D,S1,P,Q,Q1,,,Price per unit,,S,S,,P1,,How responsive is demand to changes in price?,,$1 per can,Now only 90 cents,After…,Before…,,If demand is relatively elastic,a small change in price cause

52、s a relatively large change in quantity demanded,How responsive is demand to changes in price?,,After…,Before…,a small change in price causes only a relatively small change in quantity demanded,Now only $2,,$2.20,If dem

53、and is relatively inelastic,,,Price elasticity of demand,How responsive consumer demand is to a change in price, and therefore how revenues may respond following a change in price,,Percentage change in price = $1 / $5 =

54、 20%Percentage change in passenger numbers = 5 / 100 = 5%Price elasticity of demand = 20% / 5% = 4,Percentage change in price = $0.5 / $2.00 = 25%Percentage change in passenger numbers = 10 / 50 = 20%Price elasticity

55、 of demand = 20% / 25% = 0.8,ELASTIC,INELASTIC,Demand for a product will be price elastic if:Why? Because: the product has many close substitutes consumers can buy instead if the price rises, e.g. different wash

56、ing detergents the product is expensive, such as many luxury items, so even a small increase in price may be unaffordable consumers do not need to purchase the product frequently so they have time to search for alterna

57、tives if price rises,Price elasticity of demand,,10% off,% change in quantity demanded is greater than the % change in price,>,PED > 1,Demand for a product will be price inelastic if:Why? Because: the pr

58、oduct has very few close substitutes for consumers, e.g. electricity the product is a low-cost item, e.g. a daily newspaper or box of matches the product is an essential item and needed regularly, e.g. many basic food

59、items such as bread, rice and vegetables,Price elasticity of demand,,10% off,<,PED < 1,% change in quantity demanded is less than than the % change in price,Price elasticity of supply,,How responsive producer sup

60、ply is to a change in price,,Supply is price elasticWhen the % change in quantity supplied is greater than % change in pricePES > 1,Supply is price inelasticWhen the % change in quantity supplied is less than the %

61、 change in pricePES < 1,,,For example, it takes time to grow corn so supply will become more elastic over time,Indirect taxes can be added to the prices of goods and servicesBut why do governments want to increase

62、 the prices and restrict the supply of some products? to discourage their consumption because it can be harmful, e.g. cigarettesto reduce their production because it can be harmful, e.g. the burning of oil and gas rele

63、ases harmful emissions to conserve limited natural resources, e.g. taxes on energy and water use,Subsidies can be paid to producers towards their costs of productionBut why do governments want to increase the supply a

64、nd reduce the prices of some products?to make products more affordable for those on the lowest incomes, e.g. basic foodstuffsto encourage their consumption because it can be beneficial, e.g. medicinesto encourage the

65、ir development and production because it is beneficial and creates employment, e.g. wind turbines and solar energy panels,Taxes, subsidies and market outcomes,,,,,$10 + 5% tax,The effect of an indirect tax,,,,,Objective:

66、 to reduce harmful exhaust emissions by the reducing the consumption of petrol Before tax of 40 cents per litre: 600 million litres of petrol are traded each month at the market price of 80 cents per litre A

67、fter tax of 40 cents per litre: 500 million litres of petrol are traded each month at a new market price of $1 per litreBut why doesn’t the market price rise from 80 cents to $1.20 per litre? Because demand contrac

68、ts as price rises, so petrol producers end up having to pay some of the tax to government,The effect of a subsidy,,,,,Objective: to encourage the production and consumption of biofuelBefore a subsidy of $20 per barrel:

69、 40 million barrels of biofuel are supplied and traded each month at the market price of $60 per barrelAfter a subsidy of $20 per barrel: 50 million barrels of biofuel are supplied and traded each month at