Transcript SELECTING A SUITABLE DISTRIBUTOR

‫دراسات اقتصادية بلغة أجنبية‬
‫الفرقة الثانية‬
‫شعبة نظم املعلومات اإلدارية‬
‫‪www.hims.edu.eg‬‬
‫األستاذ الدكتور‬
‫عادل املهدي‬
‫عميد املعهد العالي للعلوم اإلدارية بالقطامية‬
CHAPTER ONE
INTRODUCTION TO ECONOMICS
WHAT IS ECONOPMICS
Marshall defined economics as:
“ The study of man in everyday business of life”.
Others defined economics as:
“The Human science, which studies the relationship between scarce
resources and the various uses or wants which compete for these
resources”.
So the economics is concerned with:
The way resources are allocated among alternative uses to satisfy
human wants.
WHAT IS ECONOMIC PROBLEM
The economic problem is:
the scarcity of all resources, where the human wants are
unlimited
Human wants
are the goods and services, that people desire.
So the human wants are unlimited
Resources
are the things used to produce goods and services
which then can be used to satisfy human wants.
Economic resources are scarce or limited.
All economic decisions
involve choice in terms of:
• what to produce,
•
• how to produce,
• for whom to produce
What to produce involves:
What to produce involves decisions about
the kinds and quantities of goods and
services to produce:
 how many luxurious houses and how many
low- cost apartments.
 how many full-size and compact cars to
produce,
how much food and medical services to
supply,
how many civilian and defense goods to
provide.
How to produce involves:
How to produce requires decisions about
what techniques to be used and how the
economic resources (labor, capital, and
land) are to be combined to produce.
How goods and services can usually be
produced with many different techniques
and combinations of labor, capital, and
land, it is important to determine which
techniques should be used.
For whom to produce involves:
Payment of income to individual will
determine the distribution of goods and
services among the members of society.
Insatiability of human wants.
It is impossible to satisfy human wants because as one
want is satisfied another appears .
WHAT IS THE
ECONOMICS SCOPE
It studies individuals and organizations
involved in the production, distribution,
and consumption of goods and services.
WHAT IS THE
ECONOMICS SCOPE
Macro and Microeconomics:
Economics is divided into microeconomics and
macroeconomics.
Microeconomics is concerned with small parts of
the economy and the interrelationships between
these parts.
macroeconomics is concerned with the behavior of
aggregates affecting the whole economy
WHAT IS THE
ECONOMICS SCOPE
Microeconomic topics might be explaining
movements
in
the
prices
of
certain
commodity,.
Macroeconomic topics come under the four
headings of inflation, unemployment the
balance of payments and growth.
WHAT IS THE
ECONOMICS SCOPE
Macroeconomics also examines the factors
that determine national output.
Microeconomics
household income.
is
concerned
with
Economic resources & Free resources
Free resources: such as air, and sands, are
so large and easily available that they can be
obtained without charge.
The test of whether a resource is an
economic resource or a free resource is the
price.
Economic resources have a nonzero price,
while free resources have a zero price .
Economic resources
Economic resources can be classified
into four categories:
 land,
 labor,
 capital,
 entrepreneurship
Land
Consists of an economy’s natural resources, such as
minerals, forests, sea, rivers, and agricultural
land.
Owners of land receive rental income when it is
used to produce goods or services.
Capital
Is the human made resources and consists of tools,
equipment, machinery, buildings, and which are
used to facilitate the production of goods and
services.
Capital may be Financial capital or physical
capital.
Financial Capital
Financial
capital
consists
of
financial
instruments, such as savings accounts,
bonds, and stocks, which come when
individuals save and then lend this
saving
for
the
creation
of
equipment, machinery, and so on.
tools,
Physical Capital
Physical capital, consists of buildings, machinery,
equipments ,tools ,computers, trucks, and plants.
Financial capital is needed to purchase physical
capital.
Financial
capital
represents
claims to the physical capital.
the
ownership’s
Labor
Labor: consists of human beings,.
Labor resources can be measured in terms of the
number of people in the workforce,
People differ in skills, education, and natural
ability.
Labor may be defined as the exercise of human
mental and physical efforts in the production of
goods and services.
Human Capital : is the accumulation of past
investments in schooling, training, and health that
raise the productive capacity of people.
Entrepreneur
Entrepreneur: Certain persons, called
entrepreneurs, posses a particular talent and
perform a particular role that can not be
performed by land and capital.
Entrepreneur organizes, manages, and bears the
risks for an enterprise
Entrepreneur
Entrepreneurs are those people:
who organize the factors of production to produce
output,
who
seek out and
opportunities,
exploit
new
business
who introduce new technologies.
who have information about the best methods of
production.
who takes the risk and bears the responsibility if
the venture fails.
FACTORS INCOMES.
FACTORS INCOMES.
The various incomes which the factors receive can
also be termed factor rewards or factor returns.
Labor
receives
wages and salaries,
Land
earns
rent,
Capital
earns
interest ,
Entrepreneur
earns
profit.
Demand Law
The first law of demand tells us that:
If we lower the price of a commodity, other
things being equal, a greater quantity will be
demanded.
The demand schedule:
Specifies the units of a good or service that
individual is willing and able to purchase at
alternative prices during a given period of
time.
Demand Law
The relationship between price and quantity
demanded is inverse;
More units are purchased at lower prices
because of a substitution effect and an income
effect
For example, when coffee prices fall and
the price of tea is unchanged, more coffee and
less tea is purchased.
Demand Law
The inverse or negative relationship between
price and quantity demanded appears as a
negatively sloped demand curve.
p
x
Q
dx
p
Demand Curve:
x
D
18
16
A
14
B
12
C
10
D
8
E
6
F
4
2
D
0
100
200
300
400
500
600
700
800
900
Q
dx
Demand function:
According to the previous analysis the
demand function may takes the next
formula:
Were:
Qdx  adx  5dx Px
Q dx
= Quantity demanded (X)
a dx
= The constant term
b dx
= The demand function slope.
Px
= The unit price of commodity (x)
Demand function:
Note that the signal of
demand
function
slope
negative,
the
is
This shows that the relationship
between
price
and
quantity
demanded is inverse.
The constant term refers to the
quantity demanded even the price
is zero
Shifting the demand curve:
The demand for a good or service
is influenced not only by the
commodity’s price but also by:
The price of other goods,
Income,
Tastes,
The size of the market.
p
x
18
D
D1
16
14
D2
12
10
A
8
B
C
6
4
D1
2
D
D2
0
100
200
300
400
500
600
700
800
900
Q
dx
Price Elasticity of demand:
The responsiveness of the quantity demanded to
changes in price is known as Price elasticity of demand,.
The elasticity of demand is defined by the following
formula:
% change in quantity demanded
% change in price
Elasticity is calculated by dividing the percentage
change in quantity by the percentage change in price.
Elasticity of demand
d 
d
d
Qd x
Qd x

Px
Px
Qd x
Px

x
Qd x
Px
Qd x

Px
x
Px
Qd x
Elasticity = Slope x (Price ÷ Demand)
Qd x
Px
d 
x
Px
Qd x
Unit Elasticity
D
p
x
Qd x
Px

Qd x
Px
D
Q
dx
Elastic >1
p
x
D
Qd x
Px

Qd x
Px
D
Q
dx
Inelastic <1
D
p
Qd x
Px

Qd x
Px
x
D
Q
dx
Zero Elasticity
p
x
D
D
Q
dx
Infinite Elasticity
p
x
D
D
Q
dx
Elasticity and total revenue
When the price of a commodity falls, the total
revenue of producers (price X quantity)
increases: If ED > 1
Remains unchanged if ED = 1
Decreases if ED < 1.
‫العالقة بين املرونة واالنفاق الكلي‬
‫طلب غير مرن‬
‫‪x‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪D‬‬
‫‪a‬‬
‫‪P‬‬
‫‪b‬‬
‫‪dx‬‬
‫‪Q‬‬
‫‪P1‬‬
‫‪D‬‬
‫‪Q1‬‬
‫‪Q‬‬
‫‪0‬‬
‫‪p‬‬
‫العالقة بين املرونة واالنفاق الكلي‬
‫طلب مرن‬
‫‪x‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪D‬‬
‫‪a‬‬
‫‪P‬‬
‫‪b‬‬
‫‪P1‬‬
‫‪D‬‬
‫‪dx‬‬
‫‪Q‬‬
‫‪Q1‬‬
‫‪Q‬‬
‫‪0‬‬
‫‪p‬‬
‫العالقة بين املرونة واالنفاق الكلي‬
‫طلب مرن‬
‫‪x‬‬
‫‪D‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪‬‬
‫‪Qd x‬‬
‫‪Px‬‬
‫‪P‬‬
‫‪P1‬‬
‫‪D‬‬
‫‪dx‬‬
‫‪Q‬‬
‫‪Q‬‬
‫‪Q1‬‬
‫‪0‬‬
‫‪p‬‬
Calculate the demand elasticity of the following:
(1)Qd is 1000 at the price 10
The price changed to 20
Qd changed to 500
(2)Qd is 1000 at the price 10
The price changed to 5
Qd changed to 1200
(3)Qd is 1000 at the price 10
The price changed to 15
Qd changed to 800
Calculate the net revenue in each case
Supply
A supply schedule specifies the units of a
good or service that a producer is willing to
supply (Qs) at alternative prices (P) over a
given period of time.
The supply curve normally has a positive
(upward) slope,
Supply
ََQuantity Supply
Price
0
100
200
300
400
500
600
700
800
900
0
2
4
6
8
10
12
14
16
18
Supply Curve
I
18
p
H
16
x
S
G
14
F
12
E
10
D
8
C
6
B
4
2
A
0
100
200
300
400
500
600
700
800
900
Q
sx
Supply Function
Qsx  asx  bsx Px
Shifting the Supply Curve
p
S2
18
S
S1
x 16
14
12
10
C
8
A
B
6
4
2
0
100
200
300
400
500
600
700
800
900
Q
sx
Price of substitute
S
p
y
Py2
B
A
Py1
S
Qsx2
Qsx1
Q
sx
Price of Complementary
p
I
18
S
H
16
z
G
14
F
12
E
10
D
8
C
6
B
4
2
A
0
100
200
300
400
500
600
700
800
900
Q
sx
Elasticity of supply
Qsx
Px

Qsx
Px
In elastic supply
p
S
x
Qsx Px

Qsx
Px
S
Q
sx
Unit elasticity
p
S
x
Qsx Px

Qsx
Px
Q
sx
Elastic supply
p
Qsx Px

Qsx
Px
x
S
S
Q
sx
Zero elasticity
p
x
S
S
Q
sx
Infinite elasticity
p
x
S
S
Q
sx
Qsx  asx  bsx Px
Qdx  adx  bdx Px
Supply
Demand
Equilibrium
Equilibrium occurs at
The intersection of the market demand and market
supply curves.
At this intersection, quantity demanded equals
quantity supplied
p
x
D
S
18
16
14
Qsx  asx  bsx Px
12
E
10
9
Qdx  adx  bdx Px
8
6
4
2
D
0
100
200
300
400 500
450
600
700
800
900
Q
Ex
p
x
D1
D
S
18
16
14
12
E1
D2
E
10
9
8
6
E2
D1
4
2
D2
D
0
100
200
300
400 500
450
600
700
800
900
Q
Ex
p
x
S2
D
S
18
16
14
S1
E2
12
E
10
9
8
E1
6
4
2
D
0
100
200
300
400 500
450
600
700
800
900
Q
Ex
p
x
S2
D
S
18
16
14
S1
12
E
10
E1
9
8
6
4
2
D
0
100
200
300
400
500
600
700
800
900
Q
Ex
p
x
S2
D
S
18
16
14
S1
12
E
10
E1
9
8
6
4
2
D
0
100
200
300
400
500
600
700
800
900
Q
Ex
p
x
D1
D
S1
S
18
E1
16
14
12
E
10
8
D1
6
4
2
D
0
100
200
300
400
500
600
700
800
900
Q
Ex
p
x
D
S
18
16
14
S1
12
E
10
8
6
4
E1
2
D
0
100
200
300
400
500
600
700
800
900
Q
Ex
p
Mathematical Equilibrium
x
D
S
18
16
Qdx  adx  bdx Px
14
12
E
10
9
Qsx  asx  bsx Px
8
6
4
2
D
0
100
200
300
400 500
450
600
700
800
900
Q
Ex
Mathematical Equilibrium
Qdx  adx  bdx Px
Qsx  asx  bsx Px
‫ن‬
‫فإن‬
‫التواز‬
‫عند‬
Qdx  Qsx
adx  bdx Px  asx  bsx Px
Mathematical Equilibrium
adx  bdx Px  asx  bsx Px
adx  asx  bdx Px  bsx Px
(adx  asx )  Px ( bdx  bsx )
Px  (adx  asx )  (bdx  bsx )
Mathematical Equilibrium
Px 
(adx  asx )
(bdx  bsx )
Exercise
1) Calculate the equilibrium price and quantity
Qdx  100 0.5Px
Qsx  50 0.5Px
2) Calculate the equilibrium price and quantity
Qdx  30 0.2Px
Qsx  10 0.3Px
Qdx  100 0.5Px
Qsx  50 0.5Px
100 0.5Px  50 0.5Px
100  50  0.5Px  0.5Px
50  (1) Px
Px  50  (1)  50
Qdx  100 0.5(50)  75 Qsx  50  0.5(50)  75
Qdx  100 0.5Px
D
p
Qsx  50 0.5Px
S
x
E
50
D
75
Q
Ex
1) Calculate the equilibrium price and quantity
Qdx  100 8Px
Qsx  Zero  2Px
2) Calculate the equilibrium price and quantity
Qdx  800 5Px
Qsx  300 5Px
The Circular flow of income
Revenue
Resource
market
Money income
Factors of production
Businesses
Households
Product
Product value
Product
market
Expenditure