IGCSE经济学课件(英文版)

1、IGCSE/O Level Economics,1.1 The basic economic problem,S1,Factors of production,Natural resources = land Man-made resources = capital Human skills and effort = labour Business know-how = enterprise,Production,Using inputs (resources) to make outputs (goods and services) to satisfy the needs and want

2、s of consumers,Consumption,Using up goods and services (products) to satisfy consumers needs and wants,The basic economic problem,Human 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 s

3、killed workers. But there are a number of different 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 only have a limited amount of mon

4、ey but have many needs and wants to satisfy,$100,Food? Entertainment? Clothing?,Defence? Health 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, should the government cut taxes by US$250 mi

5、llion?) 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 are the next best alternatives foregone?,Production possibility curves,A firm producing cars and trucks What is the opportunity co

6、st of producing 20 more trucks?,An economy producing consumer goods and capital goods What 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 o

7、r more products a firm or an entire economy can produce with its available resources Resources are being used efficiently if they are producing their maximum output But, because resources are limited, producing more of one product means producing less of another PPCs are therefore a useful way of sh

8、owing 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 Economic systems,S2,Resource allocation,Because productive resources are scarce relative to human wants we must decide:,Economic systems,Who in an economy decides

9、what goods and services to produce, how to produce them and who to produce them for, and how are these decisions are made?,Economic systems,China Cuba,North Korea,Denmark France Italy Sweden UK Many developed economies,Argentina Mauritius Nepal Paraguay,Bahamas Singapore,The market economic system,P

10、rivate 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 individuals. There is little or no role for government or a public sector and therefore little or no taxation or pub

11、lic spending.,The price mechanism,A market is any set of arrangements that brings together all the producers 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 the

12、ir utility (satisfaction),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 PRICE RISES,MARKET PRICE FALLS,As consumer demand for a product fal

13、ls,Whats good about the market system?,A wide variety of goods and services will be produced to satisfy consumer wants Firms respond quickly to changes in consumer wants and spending patterns The profit motive of firms encourages them to develop new products and use the most efficient methods of pro

14、duction There are no taxes,Profits can be increased by increasing sales and/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 a totall

15、y 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 wasteful or harmful activities,NATIONAL PARK,How the market system can fail,Market failure:

16、when free markets fail to produce goods and services that are worthwhile or when the decisions of producers or consumers result 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 fai

17、lures: It can provide useful and essential goods and services It can provide goods and services for people in the greatest need It can employ people in public sector organizations and provide financial support to private sector firms to boost output and employment It can outlaw the production of har

18、mful goods and dangerous activities It can outlaw business practices that restrict competition or mislead consumers,The mixed economic system,A mixed economy therefore combines the advantages of a market economic system with:,How mixed?,Government intervention: some problems,By correcting failures i

19、n some markets, a government may distort the allocation of resources and cause problems in others: 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

20、 and services 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 Level Economics,2.2 How markets work,S3,What is a market?,The market for a go

21、od 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 and 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 consum

22、ers,If cans were 10 cents each,Few producers Many consumers,Demand,The want or willingness of consumers to buy a product To be an effective demand a consumer must have enough money to buy the product As price rises, the quantity demanded by consumers contracts As price falls, the quantity demanded b

23、y consumers extends A 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 individual consumer demands for a particular product,A rise in demand The market demand curve shifts outwards Po

24、ssible causes are: an increase in disposable incomes after tax a rise in the price of substitutes a fall in the price of a complement tastes and fashion favour the product an increase in advertising a rise in the population other factors, e.g. hot weather increases demand for cold drinks and sun cre

25、ams,Market demand,The sum of all individual consumer demands for a particular product,A fall in demand The market demand curve shifts inwards Possible causes are: a fall in disposable incomes after tax a fall in the price of substitutes a rise in the price of a complement tastes and fashion favour o

26、ther products a reduction in advertising a fall in the population other factors, e.g. hot weather reduces the demand for winder coats,No, if the product is an inferior good As income rises, consumers buy less as they switch their demand to other more preferable products,Yes, if the product is a norm

27、al good As income rises, consumers are willing and able to buy more,Income and demand,But 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 p

28、roducers extends because production becomes more profitable As price falls, the quantity supplied by producers contracts because production becomes less profitable A supply curve slopes upwards,Market supply,The sum of all individual producers decisions about the supply of a particular product,A ris

29、e in supply The market supply curve shifts outwards Possible causes are: other products become less profitable to produce a fall in the cost of factors of production an increase in the supply of resources technical progress and improvements in production processes and machinery an increase in busine

30、ss optimism and expectations of profit the government subsidizes production and/or cuts taxes on profits other factors, e.g. good weather boosts crop harvests,Market supply,A fall in supply The market supply curve shifts inwards Possible causes are: other products become more profitable to produce a

31、 rise in the cost of factors of production a fall in the supply of resources technical failures, such as a cut in power supplies or mechanical breakdowns a fall in business optimism and profit expectations the government withdraws subsidies and/or increases taxes on profits other factors, e.g. wars

32、and natural disasters,The sum of all individual producers decisions about the supply of a particular product,Market equilibrium,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 supply A

33、t the equilibrium market price the quantity consumers wish to buy is exactly equal to the quantity producers wish to sell If a market is in equilibrium there are no pressures to change the market price,Market disequilibrium,Price per unit,Quantity traded per period,D,D,S,S,Pe,0,A market is in disequ

34、ilibrium 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 will 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 ne

35、ed to rise to reduce consumer demand and to encourage producers to supply more.,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,P1,Q1,Q,Price per unit,S1,S1,P,A decrease in market price,If

36、 market demand falls OR If market supply rises,Price per unit,Quantity traded,0,D1,S,D1,D,D,S,P,P1,Q1,Q,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 p

37、rice causes 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 demand is relatively inelastic,Price elasticity of demand,How responsive consu

38、mer demand is to a change in price, and therefore how revenues may respond following a change in price,Percentage change in price = $1 / $5 = 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

39、 change in passenger numbers = 10 / 50 = 20% Price elasticity 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 washing detergents the product

40、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 alternatives if price rises,Price elasticity of demand,10% off,% change in quantity demanded is greater than the % c

41、hange in price,PED 1,Demand for a product will be price inelastic if: Why? Because: the product 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 bas

42、ic food items such as bread, rice and vegetables,Price elasticity of demand,10% off, total social benefit,Economic welfare can be improved by reducing production and consumption,Economic welfare can be improved by encouraging more production and consumption,Tax on landfill to increase by 20% as the

43、government attempts to reduce the amount of waste that ends up in the ground.,Correcting market failure,How can a government in a mixed economy ensure that firms and consumers take account of the external costs and benefits of their decisions and actions?,India to enforce new regulations to curb noi

44、se pollution,South Africa bans plastic bags to reduce litter Retailers caught handing out the bags now face a fine of 100,000 rand ($13,800) or a 10-year jail sentence,The Chinese government announces 18 recycling projects are to receive government subsidies covering up to 50% of total investment co

45、sts,The Australian government has banned live cattle exports to Indonesia until safeguards are adopted to end the brutal slaughter of animals,Government unveils plan to tax the carbon emissions of the worst polluters,Correcting market failures,To reduce external costs,Raise taxes on firms with activ

46、ities that create external costs to reduce those firms after-tax profits, e.g. taxes on emissions from the use of fossil fuels, on landfill waste and mineral extraction Increase indirect taxes on products that are considered harmful to raise their prices and discourage their consumption, e.g. taxes

47、on cigarettes, petrol, plastic bags Use regulations and fines to discourage the production or consumption of products or activities that are harmful, e.g. smoking bans, planning controls, legal limits on air and water pollutants, anti-litter laws,To increase external benefits,Ensure public sector pr

48、ovision of socially and economically desirable goods and services, e.g. providing free vaccinations and education, public parks, public transport and roads Provide subsidies to private sector firms to reduce the cost of activities and products that have external benefits, e.g. subsidies for recyclin

49、g, renewable energy, organic farming Use regulations to encourage firms to change their production methods, e.g. rules to phase out traditional light bulbs to encourage a switch to low-energy light bulbs, health and safety regulations, animal welfare laws,IGCSE/O Level Economics,3.1 Money and financ

50、e,S5,Why do we need money?,To exchange for those goods and services we each need and want but are unable to produce for ourselves, because we are not self-sufficient (individually we cannot produce everything we need and want) we specialize in those tasks and productive activities we are best able t

51、o do and therefore need to trade with producers of other products,Barter,Barter involves exchanging goods and services, i.e. payment for one product is made with another,Problems with barter are: finding someone to swap with (there must be a double coincidence of wants) , how to agree values (how ma

52、ny apples to one cow, and how much cheese for one apple?),The functions of money,IOU $20,To overcome the problems of barter a money must be:,Prices,Choosing a good money,A good money must be: acceptable to others in payment for goods and services durable so that it is not worn down or damaged easily

53、 though frequent use portable so that it is easy to carry around divisible into smaller units and values scarce, otherwise if it is freely available it will be of little or no value to others,What is money?,Notes and coins + bank deposits,Bank deposits are near money because they can be withdrawn to

54、 provide cash to make payments reasonably quickly,Financing economic activity,Banks lend money to people, firms and government organizations to finance their spending Stock can be sold on the stock market to provide long-term finance for companies and governments,The banking system,Banks are financi

55、al intermediaries: they bring together customers who want to save their money with customers who want to borrow it,SAVING MONEY Banks need money to make loans Banks offer savers interest to encourage them to save their money in savings accounts The interest rate is a reward for saving money Savers m

56、ay be offered higher interest rates for long-term savings,The price of money, is the interest rate (expressed as a % per unit of money) The base rate of interest in an economy is set by the central bank or the government. It is the rate which the central bank will charge banks for lending them money

57、 if they run short of cash.,For example: to attract savings, a bank offers its customers annual interest of 3% a person who saves $1,000 in a savings account for one year will receive $30 in interest at the end of that year,The price of money,For example : a small firm borrows $10,000 repayable in o

58、ne year the interest rate is 5% per year the total repayable at the end of the year = $10,500,BORROWING MONEY The interest rate is the cost of borrowing money Lending money to people and firms involves administrative costs and risks of non-repayment. Banks must cover these costs to make a profit The longer the term of the loan and the greater the risk of non-repayment the higher the interest rate charged Interest charges also compensate banks for price inflation which will reduce the value of the money they have tied up in loans,The role of a central bank,