The possibility of any economy is limited. WHAT DO YOU THINK, WHAT IT LIMITS?
Volume of resources and how it can use.
On the one hand we have those limited resources and on the other human needs that are no limited and constantly growing.
And there is the question that first needs to meet - what and how much to produce first? We must make a choice between consumption goods and investment. We produce one or both? WHAT DO YOU THINK?
Maybe I'll show you it on an example. We have a country A in which you can produce bread and machines for making bread.
In the table we have examples of variants of our country's use resources.
a - just bread
d - just machine
b,c - intermediate variants
After connecting points we get a curve. SOMEONE KNOWS HOW IT'S CALLED? THIS IS product transformation curve - also called Production-Possibility Frontier (PPF)
(Of course, we could substitute any numbers here, even thou not operate. just the same tones, then we obtain a continuous line, because the points almost overlap each other. Would be some side by side)
Moving between the points we make movement of resources, or the transformation of one commodity to another. That is why the curve has the name
Why Production-Possibility Frontier? on the curve because they are variants of the maximum, cost-efficient use of resources, more is impossible
If the graph lies not appear on the straight sections are not cost-effective options - do not make full use of resources or not available at this time.
LOCATION OF THE CURVE MAY BE DIFFERENT. WHERE DO YOU THINK CARES? Since the amount of our resources and efficiency.
WHAT DETERMINES THE EFFICIENCY?
• Knowledge and skills
• The discipline of work
• Level of technology
• Organization of production
The higher efficiency of this curve lies further from the origin
From the curve of transformation involves the concept of opportunity cost. SOMEONE KNOWS WHAT IS IT?
Increase the production of one we need to reduce the production of a second. Choosing one resign from other. With any such choice is related to the cost. And this cost as an alternative variant of the most valuable resource is the opportunity cost.
PRAXIOLOGY SAYS SOMETHING TO SOMEONE?
It is the science of rational management
RATIONALITY MANAGEMENT
Resources are limited so we need to rationally manage them - that make the most favorable choices. And the choice we have when we have several competing options as in the example above.
RULE OF RATIONAL MANAGEMENT
WE HAVE TWO OPTIONS. ANYONE REMEMBER THAT?
In certain inputs the greatest effect
The effect with minimum inputs
Regarding the effects of the inputs and inversely regulates the economic effectiveness of management.
In the first case, the higher the better, in the second, the less the better
In connection with this rule and comparisons of obtained variants, appears to us to economic calculation. That is the account in which we aim to choose the most economical decision. It's not the bill in terms of procedures, but with the same choice of options. The procedures are important, but more important are the criteria.
To use the economic calculations we must meet three criteria. WHAT?
First Effects of business and incurred expenditures must be measurable, quantifiable - identifiable expressed in units
Second Expressed in the same units
Third Uniqueness criterion for selection
ECONOMIC RIGHTS
WHAT IS IT?
These are some general laws that govern business processes. Describe repetitive and relationships between elements of the economy.
We understand the economic process itself as a diverse, recurring economic actors. These activities are held in different conditions, are a reaction to different stimuli and differently affect the world around them,. Among these activities there are different relationships.
Economics examines these relationships in different ways, eg observation of reality, an analysis of facts and statistics and experiments. And by using these methods tries to find out which relationships are important.
WHAT ARE THE ECONOMIC CATEGORIES? Abstract concept expressing the general properties of the elements of economic processes (labor, product, market, merchandise)
Fixing these significant relationships means to formulate the laws of economics. A connected up economic theories. Theory is a lot. And each includes a set of definitions and assumptions relating to a particular aspect of the economy. Theories attempt to explain and interpret economic reality ..
Not that the law works only under specific conditions, others are uniwerslane.
AN EXAMPLE OF THE FIRST PRINCIPLE IS LAW OF SUPPLY AND DEMAND ANYONE CAN REMEMBER WHAT IT IS?
In a competitive market, there is a tendency to set the prices of goods in a balance.
AN EXAMPLE OF A SECOND. LAW OF DIMINISHING RETURNS. WHAT IS IT?
After a certain relationship between effort variable and permanent production factor, further increasing the number of variable factors led to an ever smaller increase in production.
Character of economic laws:
• statistical regularities - economic laws shall not be revealed in each individual case, but with the mass nature
• The law of large numbers - not on the same events, but their occurrence. Every law should have the economic clauses "usually", "usually", etc..
• Objectivity -the real characteristics of the economic processes and their existence and does not depend on human will and awareness.
We can influence the economic laws, ANYONE KNOW HOW? By changing the conditions in which there are.