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/