1. NETA PowerPoint Presentations to accompany The Future of Business
chapter 1
NETA PowerPoint Presentations to accompany The Future of Business
Fourth Edition
Adapted by
Norm Althouse,
University of Calgary
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2. Economics: Evolving Systems
chapter 2
Economics: Evolving Systems
Chapter 2
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3. Making the Connection Copyright © 2014 by Nelson Education Ltd.
chapter 1
Making the Connection
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4. Learning Outcomes
Explain what economics is and how the three sectors of the economy are linked.
Understand the primary features of the world’s economic systems.
Explain the four types of market structure.
Discuss the basic microeconomic concepts of demand and supply, and how they establish prices.
Show how economic growth, full employment, and price stability indicate a nation’s economic health.
Describe how the Bank of Canada uses monetary policy, and how governments use fiscal policy to achieve their macroeconomic goals.
List some of the trends that are reshaping micro- and macroeconomic environments.
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5. Explain what economics is and how the three sectors of the economy are linked.
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6. Basic Terms
Economics – The study of how a society uses scarce resources to produce and distribute goods and services.
Microeconomics – The sub-area of economics that focuses on individual parts of the economy, such as households or firms.
Macroeconomics – The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products.
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7. Business and Economies Working Together
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8. Resources Used to Create Products
Factors of Production
Natural Resources
Labour
Resources Used to Create Products
Capital
Knowledge
Entrepreneurship
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9. Exhibit 2.1: Economics as a Circular Flow
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10. Understand the primary features of the world’s economic systems.
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11. Economic Systems
An economic system is the combination of policies, laws, and choices made by a nation’s governments to establish the systems that determine what goods and services are produced and how they are allocated.
Joe Fox/age fotostock
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12. Economic Systems
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13. Economic Systems
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14. Explain the four types of market structure.
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15. Competing in a Free Market
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16. Perfect Competition A large number of small firms are in the market.
The firms sell similar products.
It is easy to open a new business or close an
existing one.
Buyers and sellers have good information about prices, supply sources, and so on.
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17. Monopolistic Competition
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18. Oligopoly Copyright © 2014 by Nelson Education Ltd.
Images Etc Ltd/Getstock
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19. Pure Monopoly
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20. Discuss the basic microeconomic concepts of demand and supply, and how they establish prices.
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21. Nature of Demand
Demand
The quantity of a product that people are willing to buy at various prices.
Exhibit 2.5: Demand Curve for Snowboarder Jackets
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22. Nature of Supply Supply
The quantity of a product that businesses will make available at various prices.
Exhibit 2.6: Supply Curve for Snowboarder Jackets
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23. The quantity of a product demanded equals the quantity supplied
Equilibrium
Equilibrium
The quantity of a product demanded equals the quantity supplied
Exhibit 2.7: Equilibrium Price and Quantity
The number of snowboarder jackets produced and bought at $80 will tend to rest at equilibrium unless there is a shift in either demand or supply.
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24. Changes in Demand and Supply
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25. Show how economic growth, full employment, and price stability indicate a nation’s economic health.
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26. Macroeconomic Main Goals
Striving for Economic Growth
Full Employment
Price Stability
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27. Striving for Economic Growth
Drawbacks of Economic Growth
Pollution
Strain on public facilities/programs
GNP: Measures what is produced by a nation regardless of where the factors of production are.
GDP: The total market value of final products produced/supplied within a nation’s border.
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28. Business Cycles An increase in business activity results in a rise in:
Eventually these all peak and decline.
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29. Keeping People on the Job
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30. Keeping Prices Steady Inflation: Average of all prices is rising.
Demand-Pull:
Demand for products is greater than supply.
Cost-Push:
Increases in production costs push up prices.
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31. Consumer Price Index (CPI) Producer Price Index (PPI)
Measuring Inflation
Consumer Price Index (CPI)
Index of prices of a “market basket” of products purchased by consumers.
Producer Price Index (PPI)
Prices paid by producers for raw materials, partially finished goods, and finished products.
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32. Describe how the Bank of Canada uses monetary policy, and how governments use fiscal policy to achieve their macroeconomic goals.
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33. Achieving Macro Goals
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34. List some of the trends that are reshaping micro- and macroeconomic environments.
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35. The Future of Economics
Lack of confidence in the markets.
Meeting competitive challenges.
Increasing entrepreneurship worldwide.
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