Lecture 1.pptx

Editor's Notes

• #4: Scarce means limited
• #6: Economics and Economic Economist
• #7: Income level of garments workers - Microeconomics Income level of all the citizen of Bangladesh – Macroeconomics. GDP = Gross Domestic Product Inflation: Increase in general price level of all products and it means decreasing the purchasing power of money. The effects of rent control on housing in Bangladesh Deflation: Decrease in general price level of all products and it means increasing the purchasing power of money. Home work: What is inflation and deflation? Which countries are suffering from inflation and deflation in 2020 and the rate. 5 countries.
• #8: Analyze the income of an individual or of an industry and not the national income of a country.
• #9: The export of garments products was going down in 2019 compare to 2018. Government should give more facilities to garments industry in order to increase the export of goods.
• #14: Perfect Competition: Large Number of buyers and Sellers, commodity is homogeneous, buyer and seller can influence price.
• #15: An economist might say, ceteris paribus, raising the minimum wage increases unemployment; increasing the supply of money causes inflation; Most, though not all, economists rely on ceteris paribus to build and test economic models. In simple language, it means the economist can hold all variables in the model constant and tinker with them one at a time. If everything else is constant, increase in price will cause a decrease in demand of a product 
• #17: So far we have established that people must make choices because scarcity exists. For example, you have chosen to read this chapter. In making this choice, you denied yourself the benefits of doing something else. You could have watched television, texted friends, taken a nap, eaten a few slices of pizza, read a novel, shopped for a new computer, and so on. Whatever you would have chosen to do is the opportunity cost of your reading this chapter. For example, if you would have watched television instead of reading this chapter—if this was your next best alternative—then the opportunity cost of reading this chapter is watching television. example, Ryan, who is a sophomore at college, attends classes Monday through Thursday of every week. Every time he chooses to go to class, he gives up the opportunity to do something else, such as earn $12 an hour working at a job. The opportunity cost of Ryan’s spending an hour in class is $12. Now let’s raise the opportunity cost of attending class. On Tuesday, we offer Ryan $70 to skip his economics class. He knows that if he attends his economics class, he will forfeit $70. What will Ryan do? An economist would predict that as the opportunity cost of attending class increases relative to its benefits, Ryan is less likely to go to class.
• #19: For example, a consumer is willing to pay $5 for an ice cream, so the marginal benefit of consuming the ice cream is $5. However, the consumer may be substantially less willing to purchase additional ice cream at that price – only a $2 expenditure will tempt the person to buy another one. If so, the marginal benefit has declined from $5 to $2 over just one extra unit of ice cream. Thus, the marginal benefit declines as the consumer's level of consumption increases. For example, a production line currently creates 10,000 widgets at a cost of $30,000, so that the average cost per unit is $3.00. However, if the production line creates 10,001 units, the total cost is $30,002, so that the marginal cost of the one additional unit is only $2. This is a common effect, because there is rarely any additional overhead cost associated with a single unit of output, resulting in a lower marginal cost Marginal = Additional