Download Assignments 1 Instructor: Sireen Abdelqader Student Name

Assignments 1
Instructor:
Sireen Abdelqader
Student Name:
Bashaer Ahmed Alghamdi
Student ID #
200900882
Course Name
Introduction of macroeconomics
Course Code
ECON 1311
Section
204
CRN:
1310
Assignment Name
Assignment 1
Chapter 1
Economics is the study of how societies use scarce resources to produce valuable
commodities and distribute those commodities among various peoples.
Scarcity : Goods are limited relative to desires.
Efficiency : make the best use of its limited resources.
Economic Efficiency :requires that an economy produce the highest combination of
quantity and quality of goods and services given it’s technology and scarce resources.
Microeconomics: the behavior of individual components of an economy
Macroeconomics : the functioning of the economy taken as a whole.
Market economy individuals and private firms make the major decisions about
production and consumption.
Command economy these decisions are made by the government.
mixed economies, with elements of both market and command decision making.
Opportunity Costs : measure the cost of doing something in terms of the next-best
alternative that is given up.
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Q1: what dose Production-Possibility Frontier shows ?
Answer :
PPF shows the maximum quantity of goods that can be efficiently produced by an
economy, given it’s technological knowledge and the quantity of available inputs.
Q2: fill in the blank
The effect of economy growth on a country’s production possibilities
……………………..
Answer :
enables a country to produce more of all goods and services.
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Chapter 2
A market is a mechanism through which buyers and sellers interact to determine
prices and exchange goods, services and assets.
The price is the value of the good in terms of money.
Market Equilibrium : occurs when the price equal to the quantity .
Invisable hand : that private interest can lead to public gain or that individuals
seeking their economic self-interest actually benefit society more than they would if
they tried to benefit society directly.
DIVISION OF LABOR: dividing production into a number of small specialized
steps or tasks
Specialization : accrue when people and countries concentrate their effort on a
particular tasks.
Public goods : commodities which can be enjoyed by everyone and from no one can
be excluded.
Equity: the benifets of these resources and disturbute fairly among member of
sosiaty.
Imperfect Competition : occurs when a buyer or seller can affect a good’s price.
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Q1: when dose Market Equilibrium accurs ?
Answer :
When price equal to quantity.
Q2: how market solve the three economic problem ?
Answer :
1. what goods and services will be produced.
2. how things are produced.
3.for whom things are produced.
Q3: what is the three main economic functions that the Governments have in
a market economy:
1. Increase efficiency by promoting efficiency, curbing externalities
like pollution, and providing public goods.
2. Promote equity by using Tax and expenditure programs to
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redistribute income
3. Government foster Macroeconomics stability and growth
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Chapter 3
Demand curve, demand schedule : it is the relationship between the market price of
the good and the quantity.
Demand Curve : the graphical representation of the demand schedule.
Substitution effect : occurs because a good becomes relatively more expensive when
its price rises.
Income effect : is the change in an individual's income and how that change will
impact the quantity demanded of a good or service.
The supply schedule (and supply curve) for a commodity shows the relationship
between its market price and the amount of that commodity that producers are willing
to produce and sell.
Q1: what is the factor that influences consumers’ decisions to buy?
Answer :
Average income, number of buyers, price and availability of related goods, and tastes
and preferences all define the behavior of buyers in markets. Any changes in these
factors will cause the demand curve to shift.
Q2: Reason for the upward slope?
Answer :
is the law of diminishing returns (each new worker will be adding less
and less extra product
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Chapter 19
All market economies show patterns if expansion and contractions knows as
business cycles.
Economic growth : is the process when advanced economies generally exhibit a
steady long-term growth in real GDP and improvement in living standards
.
The most comprehensive measure of the total output in an economy is the gross
domestic product (GDP)
.
Price Stability: is defined as a low and stable inflation rate.
Price index: measures of the overall price level.
consumer price index (CPI) : measures the trend in the average price of goods
and services bought by consumers.
Government purchases: spending on goods and services - purchases of
tanks, construction of roads, salaries for judgers and so forth.
Government transfer payments: which increase the incomes of targeted groups
such as elderly or the unemployed.
Monetary policy uses the nations supply of money, credit and banking system to
determine short term interest rates, which in turn influences many financial and
economic conditions.
Aggregate Supply (AS): refers to the total quantity of goods and services that the
nation’s businesses willing produce and sell in a given period.
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Aggregate demand (AD) refers to the total amount that different sectors in the
economy willingly spend on goods and services in a given period.
A healthy economy is characterized as one with a high and steady level of
economic growth, a high level of employment and low unemployment, and stable
(or gently rising) prices.
A recession is a period of significant decline in total output ,income and
employment, usually lasting more than a few months and marked by widespread
contractions in many sectors of the economy.
Individuals who would like to work full-time but are currently stuck in part-time
jobs are counted as employed.
The inflation rate is the percentage change in the overall level of prices from one
year to the next.
Q1: what are the two ways to measure GDP?
Answer :
1.Nominal GDP is measured in actual market prices.
2. Real GDP is calculated in constant prices. Gross Domestic Product after accounting
for inflation.
Q2: list the goal of macroeconomic policy ?
Answer :
1. A high and growing level of national output
2. High employment with low unemployment
3. A stable or gently rising price level
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