Chapter 01, cont'd: Economics
Transcript of Chapter 01, cont'd: Economics
BUS 100
Chapter 1: Exploring the World of Business
and Economics, cont'd cc licensed ( BY NC SA ) flickr photo by Trey Ratcliff: http://flic.kr/p/9hTDQd
economics?
study of how societies
allocate scarce resources
microeconomics:
supply & demand
©1993 Bill Watterson
increased demand?
cc licensed ( BY NC ND ) flickr photo
by rosefirerising: http://flic.kr/p/K3MyB
increased prices?
cc licensed ( BY NC ) flickr photo by judy_and_ed: http://flic.kr/p/aYTyXk
Supplied
Demanded
Pric
e
Units
0 10 20 30 40 50
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
Equilibrium
Point
equilibrium price
demand elasticity
cc licensed ( BY NC SA ) flickr photo by Jim: http://flic.kr/p/GMcAK
cc licensed ( BY NC SA ) flickr photo by Gillian: http://flic.kr/p/mgE1
cc licensed ( BY ) flickr photo by Stewart Butterfield: http://flic.kr/p/AULUo
macroeconomics:
how the economy
operates
competition • pure competition
• monopolistic competition
• oligopoly
• monopoly
• monopsony
government role
• fostering competition
– antitrust
– price fixing
– mergers & acquisitions
• regulating industry
• protecting stakeholders
• stabilizing economy
– business cycle: recovery/recession/recovery
money supply
• value of money influenced by supply and
demand
– inflation
– deflation
• monetary policy
– reserve requirement
– discount rate
– open-market operations
fiscal policy
• taxing/spending power
• decreased taxes?
• increased spending?
• deficit v. debt
– deficit: this month’s charges on credit card
– debt: total credit card bill
current figures
• deficit:
–2010: $1.3T
–2011: $1.3T
–2012: $1.1T
–2013: $560B
• debt:
–Jan 2001: $5.6T
–Jan 2009: $11T
–current: $17.3 T
–$55,055/person
economic measures
• price stability
– CPI
– PPI
• economic growth
– GDP
– GNP
• employment
– unemployment (≠ jobless!)
U.S. Unemployment rate
December 2013 Jobs Report:
• economy adds 74,000 jobs
• unemployment rate 6.7%
• lowest unemployment since 2008
• Good news?
• 347,000 workers left labor market
• Oct. 2013: 204,000 new jobs
Unemployment v. Labor Force
Participation Rate
https://www.globalfinancialdata.com/gfdblog/?p=1846
Labor Force Participation Rates
by Age
http://www.bls.gov/opub/ted/2014/ted_20140106.htm
Unemployment Rate v.
Nonfarm Payroll
http://ycharts.com/indicators/total_nonfarm_payrolls/chart/