Theory
broadened production.
capital circulation time
competitive markets
costs essence, types
demand and demand law
economic types of product: GOODS AND SERVICES
entrepreneur and its main functions and types
fixed costs and variable costs
forms of social production
goods and its features
goods production: essence, conditions, features
inflation
investment: essence, types
macroeconomics and its main key words
market Economy System and its elements
market: essence and types.
methods of economic theory.
microeconomics and its main key words
money appearance, functions
monopoly
organization-juridical forms of entrepreneurship
perfectly competitive markets
price and its calculation
production factors
production forces and production relations.
property and its form
subject of economic theory
supply and supply law
the invisible hand
the production time
1. Broadened production. Expansion of production possible in various ways. While maintaining the same technical basis can increase output by increasing the use of all kinds of resources. In this case, is an increase in the scale of production, to his analysis is the concept of return on the scale. In short, you can increase the amount of a variable resource. In this case changing the proportions, in which production resources. Expansion of production in a short period is explored using the concept of diminishing returns (or decreasing performance) alternating resource or, as is sometimes said, the Act of changing the aspect ratio. It is also possible expansion of production by changing its technical base, i.e., scientific and technical progress.
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3. COMPETITIVE MARKET:A market with a large number of buyers and sellers, such that no single buyer or seller is able to influence the price or control any other aspect of the market. That is, none of the participants have significant market control. A competitive market achieves efficiency in the allocation of scarce resources if no other market failures are present. A competitive market is a market with a sufficient number of both buyers and sellers such than no one buyer or seller is able to exercise control over the market or the price. Efficiency is achieved because competition among buyers forces buyers to pay their maximum demand price and competition among sellers forces sellers to charge their minimum supply price for the given quantity exchanged. Competitive markets exist when there is genuine choice for consumers in terms of who supplies the goods and services they demand. Competitive markets are characterised by various forms of price and non-price competition between sellers who are bidding to increase or protect their market share.(рисунок)The market model presented here depicts a typical competitive market that has achieved equilibrium. The market demand curve is labeled D and the market supply curve is labeled S. Competition among buyers forces the market price up to the maximum demand price on the demand curve. Competition among sellers forces the market price down to the minimum supply price on the supply curve. With competition among both buyers and sellers, the market price is simultaneously on both the demand curve and the supply curve. This result is illustrated by the market equilibrium achieved at price Po and quantity Qo. The competitive forces of demand and supply automatically generate this market equilibrium. If the going market price is higher or lower than Po, creating a shortage or surplus, then competitive forces eliminate the imbalance and restores equilibrium. A competitive market is efficient because equilibrium is achieved where the demand price and supply are price equal.
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5.demand and demand law.In economics, demand is an economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time.
In economics, the law of demand is an economic law, which states that consumers buy more of a good when its price is lower and less when its price is higher (ceteris paribus).The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good.
6. Economic types of product: GOODS AND SERVICES Economics is concerned with the production and distribution of goods and services. Goods would be defined as anything that anyone wants or needs. Services would be the performance of any duties or work for another; helpful or professional activity. The distribution of goods and services is referred to as marketing. The marketing of goods and services can add almost as much to the cost as the actual manufacturing of the goods. Marketing a product refers to the advertising, and other efforts to promote a products sale.
There are many different kinds of goods. Consumer goods are those such as food and clothing, that satisfy human wants or needs. Producer goods are those such as raw materials and tools, used to make consumer goods. Capital goods are those such machinery, used in the production of commodities or producer goods. There are untold numbers of services. A short list would include educational, health, communication, transportation, social services.
7. Entrepreneur and its main functions and types An entrepreneur is a person who has possession of a new enterprise, venture or idea and is accountable for the inherent risks and the outcome. These are the functions performed by an entrepreneur: 1. Planning of the project: He is the organizer to conceive the idea of launching the project and to program the structure of business.2. Management: The entrepreneur is also responsible for the management of business. He tries to have a least cost combination of factors of production. 3. To Face Risks: He faces uncertainly and bears risks in his business uncertainly comprising those risks against which it is not possible to insure. 4. Distribution of Rewards: He is responsible of distributing the rewards to all factors of production. 5. Sale of Products: An entrepreneur is also responsible of marketing, advertising.6. Scale of Production: He decided the scale of business in according with the provision of capital. Then, he takes the decision of what where and how to produce goods. Types of Entrepreneurs: 1. Self-Employed individuals who perform all the work and keep all the profit. .2. Opportunistic Entrepreneurs: Those who start a business and expand as fast as possible in order to be able to hire other employees. 3. Inventors. Those with particular inventive abilities who design a better product and then create companies to develop, produce and sell the item. 4. Pattern Multipliers: Those who look for an idea someone else has already had so that they can then create their own business based on this model. 5. Economy of Scales Exploiters. Those who benefit from a large volume of sales by offering discount prices and operating with very low overhead. 7 . Buy-Sell Artists: Those who buy a company for the purpose of improving it so that they can sell it again for a profit.9. Internal Entrepreneurs (Intrapreneurs):Those who create new ideas and turn them into a successful project within an existing business. 10. Franchisee:A franchisee is an individual who starts a business for which a widely known product image has already been established.
8. fixed costs and variable costs. All the costs faced by companies can be broken into two main categories: fixed costs and variable costs. Fixed costs are costs that are independent of output. These remain constant throughout the relevant range and are usually considered sunk for the relevant range (not relevant to output decisions). Fixed costs often include rent, buildings, machinery, etc. Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc. In accounting they also often refer to mixed costs. These are simply costs that are part fixed and part variable. An example could be electricity--electricity usage may increase with production but if nothing is produced a factory still may require a certain amount of power just to maintain itself.
9. Forms of social production Forms of social production: 1.Commodity production is the production of wares for sale. It is a type of production in which products are produced not for direct consumption by the producers, as in subsistence production, but are surplus to their own requirements and are produced instead specifically with the intention of sale in the market, usually to obtain income. In this case, production for use contrasts with production for exchange. In principle, the products traded as commodities could be goods or services sold as "products", but often the use of the term commodity production is restricted to the production of goods.2. Subsistence production is kind of social production in which farmers grow only enough food to feed the family and to pay taxes or feudal dues. For subsistence production characteristic Universal manual labor, excluding its division into types: each person does all the basic work. It uses a simple technique (hoe, spades, rakes, etc.) and home-made tools. Naturally, under such conditions, employment is low productivity, output cannot any significant increase. The typical subsistence farm has a range of crops and animals needed by the family to eat during the year. Planting decisions are made with an eye toward what the family will need during the coming year, rather than market prices.
10. goods and its features In economics, a good is something that is intended to satisfy some wants or needs of a consumer and thus has economic utility. It is normally used in the plural form—goods—to denote tangible commodities such as products and materials.Goods may increase or decrease their utility directly or indirectly and may be described as having marginal utility. Some things are useful, but not scarce enough to have monetary value, such as the Earth's atmosphere, these are referred to as 'free goods'.In economics, a bad is the opposite of a good. Ultimately, whether an object is a good or a bad depends on each individual consumer and therefore, it is important to realize that not all goods are good all the time and not all goods are goods to all people.Product becomes a commodity, not because of natural properties, it is made public goods properties (use value, social labor embodied in the goods and the ability to exchange for other products). Considering the characteristics of products, it should be the ratio categories of "value", "price", "utility".Product properties - manifested in the acquisition and use of a consumer product for its intended purpose properties, physical and non-physical product characteristics that influence a buyer. The main characteristic of a product - is its use or value. Without this property, all movement of goods from one person to another is meaningless. Buyer, purchasing necessary goods, estimates its useful effect for themselves, not the labor expended in its production. Attributes can be divided into several categories: social features, functionality, ergonomics, safety, aesthetics, and product safety. Functional properties determine the usefulness of the goods, social - is characterized by its usefulness, relevance to society, ergonomic qualities of the product is characterized by its convenience, hygiene and comfort of operation, reliability, product features the ability to meet accepted standards of safety in the community
11. Goods production: essence, conditions, features The main condition for the emergence and existence of commodity production is the social division of labor. Social division of labor - is the separation of different types of work that contributed to increased productivity and created the material conditions for a regular exchange. With the development of society, new industries, thereby deepening social division of labor. This leads to the fact that the farms specializing in the production of a product cannot make full use of it to their needs and, at the same time meet the needs of all long. This calls for the exchange, and with it the production of commodities.However, for the commercial production of the social division of labor is not enough. Social division of labor existed in the primitive community. Some produced tools, others - household items, but the products of their labor have been received in exchange (selling). Owner of all the products was a community. Another thing, when it comes to the relationship of the different communities. With the emergence of private property and the surplus product produced than necessary to sustain life manufacturers, their separation has increased the opportunities for the development of commodity production increased and the scope of commodity-money relations expanded.Its essential features are:
Social division of labor as a material condition for the existence of commodity production.
Private ownership of the means of production and the products of labor.
Personal work the owner of the means of production, satisfaction of public needs is through sales of products of labor.
Economic bond between people through the market, ie is social in nature.
typical features of
is open;
It happens on the social division of labor;
facilitate the application of machine technology;
economic isolation of producers.
12. Inflation means a persistent rise in the price levels of commodities and services, leading to a fall in the currency’s purchasing power. The problem of inflation used to be confined to national boundaries, and was caused by domestic money supply and price rises. In this era of globalization, the effect of economic inflation crosses borders and percolates to both developing and developed nations. The following factors can lead to inflation: Printing too much money. Increases in production costs. Tax rises. Declines in exchange rates. Decreases in the availability of limited resources such as food or oil. War or other events causing instability. Effects of Inflation. One of the economic effects of inflation is the change in the marginal cost of producing money. This involves the appropriate 'price' of money which, in this case, is the nominal rate of interest. This 'price' indicates the return which has to bepre-determined to hold back the printing presses, in place of some other assets which offer the market interest rate. In addition, if a country has a higher rate of inflation than other countries, its balance of trade is likely to move in an unfavorable direction. This is because there is a decline in its price competitiveness in the global market. A high rate of inflation can cause the following economic impediments: The value of investments are destroyed over time. It is economically disastrous for lenders. Arbitrary governmental control of the economy to control inflation can restrain economic development of the country. Non-uniform inflation can lead to heavy competition in the global market and threaten the existence of small economies. High levels of inflation tend to lead to economic stagnation. Measures to Control Inflation. The central banks, monetary authorities or finance ministries of most nations have the authority to take economic measures to control rising inflation by regulating the following factors: Reducing the central bank interest rates and increasing bank interest rates. Regulating fixed exchange rates of the domestic currency. Controlling prices and wages. Providing cost of living allowance to citizens in order to create demand in the market.
13. Investment: essence, types
Investment is defined as any use of resources intended to increase future production output or income.
Investments are seen as a process that reflects the movement of value, and as an economic category - economic relations, involving the movement of value, investments in fixed assets.
Investments - this is delaying the money for tomorrow to be able to get more in the future. One part of investments - consumer goods, they are deposited in the reserve (investments to increase the reserves). There are many types of investment, each with its own level of risk and return.
Bank savings Savings accounts with New Zealand’s major banks are one of the most common and least risky ways to store your money for the short term. Credit unions and building societies also offer savings accounts. When you deposit money in an account you are lending it to the bank, which pays you some interest in return. The interest you can earn is relatively low, so savings accounts are not the best option if you are looking for long-term growth.
Term deposits Like savings accounts, term deposits also pay interest. The difference is that you agree to lend your money to the bank for a fixed period of time such as 6 or 12 months in return for a higher rate of interest. Sometimes you can’t withdraw the money during the term of the investment. In other cases you can, but get paid a lower rate of interest. Term deposits are sometimes called ‘fixed interest’ investments.
Bonds A bond is like an IOU issued by a government, council, or company. You lend them your money for a number of years, and they promise to pay a certain interest rate – called a coupon. The level of risk involved when investing in bonds depends on the issuer. Unlike term deposits, you can sell your bonds early. Bonds are also sometimes called fixed interest investments.
Shares When you buy a share, you’re buying a small part of a company. If that company makes money, you may be paid a share of the profit, called a dividend. Like house prices, share prices are generally expected to go up over time and give you a ‘capital gain’ on your money when you sell. However, prices can fall in value as well.
Property Returns from investing in property come from rental income and from any increase in the value of property over time – called capital gain. Some people view their own home as an investment because it may grow in value. It doesn’t have the income that letting property to other individuals or businesses brings. You can invest in commercial property directly, or through managed funds.
Managed funds and KiwiSaver A managed fund is a financial product that buys a number of shares and other investments such as property, term deposits, and cash. The buying decisions are made by expert managers.
Alternatives Alternatives is a broad term often used to describe investments that fall outside the standard asset classes of cash, bonds, shares and property. Alternatives include commodities, currency and derivatives. Commodities (including gold), Currency (foreign exchange), Derivatives (including options and futures)