all of idcs economics in nine minutes let's start off with the economic problem the economic problem is simply when we have fewer resources and unlimited ones we need to know two types of goods the economy goods and the free Goods well the economy Goods have opportunity costs and the free Goods do not have opportunity costs an example is sunlight we have four factors of production you can remember the sweet cell Capital Enterprise land and labor land being the natural resources used in the production labor is the human resources used in the production capital is the man manufactured resources that are used to produce these goods and services and Enterprises the skills and willingness of a person to take risks the rewards for the factors of production is land is rent labor is Wages capitalist interest and Enterprise is profits we have two types of factors of mobility and that is geographical Mobility which refers to the willingness of someone to relocate due to employment purposes and the reasons of this could be the Family Ties related commitments and cost of living are reasons why they would not want to relocate occupational Mobility is simply when it refers to someone changing jobs and this could vary according to cost training period and education profession looking at opportunity cost opportunity cost is the cost of the next best alternate of choosing a good and you can represent the opportunity cost with the production possibility curve you need to understand the points in the production possibility curve if the point is inside it is inefficient if the point is outside it is unattainable with the movements of the PPC curve if it's an outward shift that means you have discovered raw materials new technology increasing the labor force if it's an inward shift that means there's natural disasters very low investments in Technologies and running out of resources moving on economics is divided to two microeconomics and macroeconomics with microeconomics we study particular markets while with macroeconomics we study the whole economy the market system is simply when I make economic decisions according to the price of goods and services that are dependent on the supply and demand what are the three key questions of Economics what to produce how to produce and for whom to produce the price mechanism is simply when I make a decision according to the equilibrium point where the supply and demand curve meet what is demand demand refers to the willingness and ability of customers to buy goods and services at a given price the higher the price of a good the less the demand factors that affect demand are price advertising government policies consumer tests consumer income price of substitutes interest rates individual demand is demand of one individual or firm and market demand represents the aggregate aggregate of all individual demands movement along the curve is due to change in price in the demand curve and shift of the curve either right or left is according to the factors of demand Supply refers to the ability and willingness of suppliers to provide goods and services at a given price the higher the price of the good the higher the quantity supplied the fact is that effect Supply are cost of factors of production prices of other Goods Global factors technology advances and business optimism the individual Supply is the supply of an individual producer the market supplies the aggregate of supply of all firms in the market market equilibrium is when the supply and demand are equal in an economy then we have the price elasticity of demand which is simply the responsiveness of demand to the change in price we have inelastic demand and we have elastic demand the factors that affect this is the number of substitutes the time period the proportion of income and the necessity of the product with price elasticity of supply it's the responsiveness of quantity supplied to a change in price we have inelastic supply and elastic Supply the formula for this is the percentage change in quantity supplied over percentage change in price factors that affect Bes are time availability of resources Supply available to meet demand spare production capacity available and the factor substitution available we then have the market economic system which is a system that is run by private firms and individuals market failure is simply when the price mechanism or the market mechanism fails to allocate scarce Resources with the mixed economic systems this is run by the government functions of money include medium of exchange units of account store of value standard for the preferred payment characteristics of money include acceptability durability portability divisibility and scarcity we have two types of banks Commercial Bank in central banks we then have households and the inferences on households are spending saving and borrowing with workers factors which influence the choice of occupation are the level of challenge level of danger length of training and level of Education why firms change demand for labor could be due to the productivity of Labor and why labor Supply might change could be due to the quality of training factors that cause occupational wage differentials could be job satisfaction fringe benefits labor Mobility factors that cause wage differentials in the same job could be local pay agreements discrimination non-monetary agreements specialization is production processes that are broken up into a series of different tasks trade unions are to protect the interest of its members concerning wages benefits and working conditions firms classifications of firms we have private sector secondary sector and tertiary sector we then have the public sector and private sector and the public sector is owned by the government and the private sector is run by individuals and owners merging is simply when two two or more firms agree to form an entirely new company the types of merging include horizontal integration vertical integration forward and backward and lateral integration objectives of firms are survival growth profit maximization and finally a monopoly is a company that dominates in the market let's start off with the microeconomic aims of the government which are economy growth low unemployment low inflation and stable prices balance of payment stability and redistribution of income we then have three types of policies that the government uses to boost the economy which are Physical policy monetary policy and supply side policy starting off with fiscal policy this is when the government uses factors such as tax and government spending in order to influence the economic conditions we have two types of physical policies which are expansionary Physical policy which reduces the taxes and increases the government's spending we then have the contractionary Physical policy which increases taxes and reduces government spendings the types of taxes include progressive tax regressive tax proportional tax Direct Tax and indirect tax monetary policy it is the use of interest rates to control the money supply and exchange rate to inference aggregate demand we have two types of monetary policies which are contractionary monetary policy which is used to reduce price inflation by increasing the interest rates and we have expansionary monetary policy is used during a recession to and to increase employment by cutting interest rates we then have supply side policies supply side policies aim to increase the economic growth by raising productive potential of the economy the different types of supply-side policies are tax incentives subsidies and grants Education and Training competition policy free trade agreements and deregulation economic growth economic growth is the annual increase in the level of national output that is the country's GDP and recession is the opposite of economic growth the types of employment include cyclic and unemployment structured unemployment frictional unemployment and seasonal unemployment we then have inflation and deflation inflation is the general and sustained increase in the level of prices of goods and services in an economy over a period of time while deflation is the decrease in the general price of levels of goods and services and occurs when the inflation rate Falls below zero percent we have two types of inflations cost push inflation and demand pool inflation now moving on to economic developments we have living standards poverty and population living standards standards of living refers to the Social and economic well-being of an individual's in a country GDP is the main measure of total value of all goods and services produced in a given period of time with poverty we have two types of poverty absolute poverty which are the number of people living below a certain income threshold or number of households that are unable to afford the basic goods and services we then have the relative poverty which are measures extend to which a household's financial resources fall below an average income level the causes of poverty are unemployment low wages illness age poor health care lower literacy rates High population growth and poor infrastructure with population factors that affect population growth our birth rate death rate immigration and emigration International specialization countries specialize in production of those goods and services in which they have an absolute advantage or comparative advantage a country has an absolute Advantage if it can produce a good with less resources a country has a comparative advantage if it can produce at a lower opportunity cost advantages of specialization are efficiency against labor productivity increased productive capacity and disadvantages of specialization are over specialization lack of variety of consumers High labor turnover globalization the process by which business or other organizations develop International influence or start operating an international scale multinationals operate in more than one country the benefits of free trades are cheaper products better products workers more productive International Trade increased competition and lower prices with trade protection we have tariffs subsidies quotas and embargoes foreign exchange rates exchange rate is the price of a country's currency in terms of another country's currency trade deficit means people are buying more inputs and spend less on products that are domestic products Trade Surplus means that people are buying less Imports and may be spending more on products made by domestic firms