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Transcript of Economy presentation
ECONOMY?
What is
Economy?
Substitution
of Raw
Material
What is it’s
Importance
for a Country?
ECONOMY• Economics is the study of the method of
allocating scarce physical and human means (resources) among unlimited wants or competing ends.
• In other words economics is the study of scarcity, which results when people want more than can be produced.
• Economics has become fundamentally the science of decision making.
Parts of Economi
cs
Micro Economi
cs
Macro Economi
cs
Full Employment Price Stability
Economic Growth An Equitable
Distribution of Income
Goals For Economic
Some Concepts For Economy Analysis
PHYSICAL AND ECONOMIC LAWSECONOMIC DEALS WITH THE ACTIONS OF PEOPLECONSUMER AND PRODUCER GOODsVALUE AND UTILITYTHE ECONOMY OF EXCHANGETHE PRICE IS DETERMINED BY SUPPLY AND DEMANTHE LAW OF DIMINUTION RETURNSTHE RELATION OF OBJECTIVE AND PERFORMANCE TO SUCCESSMAJOR AND SUBORDINATE OBJECTIVESTHE ECONOMY OF INITIATIVEPRE-PLANNING AND ECONOMYFEEDBACK AND IMPROVED ACTIONADVANTAGES AND DISADVANTAGESTHE THRESHOLD IDEA
Physical and Economic Laws With the physical environment the engineer
has a body of physical laws upon which to base his reasoning.
Boyle’s laws, Ohm’s law Newton’s law of motion They are supplemented by many formulas
and known facts, all of which enable the engineer to come to conclusions about the physical environment that match the facts within narrow limits.
Economic laws, therefore can no more
exact than the description of the behavior of people acting singly and collectively.
But the engineering process is concerned with the economic as well as the physical environment.
Economic Deals With The Actions Of People
Economics deals with the behavior of people individually and collectively, particularly as their behavior relates to the satisfaction of their wants.
The wants of people are motivated largely by emotional drives and tensions and to a lesser extent by logical reasoning processes.
A part of human wants can be satisfied by
physical goods and services such as ↘ Food↘ Clothing↘ Shelter↘ Transportation Communication↘ Entertainment↘ Medical Care↘ Educational↘ Opportunities↘ Personal Services but man is rarely satisfied by physical things
alone.
Consumer And Producer Goods Two Classis For Economists
Consumer Goods
• Consumer goods are products and services that directly satisfied human wants. Examples of consumer goods are
• Television Set• House• Shoes• Orchestra• Health Services.
Producer Goods
• Producer goods are, in the long run, used as a means to an end; namely, that of producing goods and services for human consumptions.
• Examples Of This Class Of Goods Are• Lathes• Bulldozers• Ships• Railroad Cars.
Value And Utility
Value
The term value, like most other widely used terms, has a variety of meanings.
In economics, value designates the worth that a person attaches to an object or a service.
The value of an object is not inherent in the object but in inherent in regard that a person or people have for it.
Utility The general economic meaning of the
term utility is the power to satisfy human wants.
The utility that an object has for an individual is determined by him, thus the utility of an object, like its value, is not inherent has for it.
The Economy Of Exchange Economy of exchange occurs when
utilities are exchanged by two or more people.
In this connection, a utility means anything that a person may receive in an exchange that has any value what–so ever to him; for example, lather, a dozen pencils a meal, music, or a friendly gesture.
The Price Is Determined By Supply And Demand
In a free enterprise system, the price of goods and services is ultimately determined by supply and demand.
The supply curve shows the relationship between the quantity of a product that vendors will offer for sale and the price of
the product.
The Elasticity Of Demand Consumer goods and
services may be classified as being either necessities or luxuries.
The classification is relative
The classification depends upon the individual’s economic and social position.
This relationship is illustrated in fig given as
The Law Of Diminution Returns The term law of diminishing return was
originally used to designate the relation of input of fertilizers to land and the output of crops.
“The amount of product obtained in a productive process varies with the agents of production are combined. Of only one agent is varied, the product per unit of this agent may increase to a maximum amount, after which the product per unit may be expected to diminish but not necessarily proportionately.”
The Relation Of Objective And Performance To Success
Attention may be focused on doing very worth-while things or on doing things well.
Economic success depends to an extent on each and therefore an optimum balance should be sought.
All too often the effort of each is not given consideration separately in contemplating understandings.
Pre-planning And Economy Pre-planning is the formulation, prior to
beginning an undertaking, of more or less detailed plans for carrying it out.
One important economy of this practice is that it permits specialization.
Feedback And Improved Action Feedback for the purpose of improving
future is an essential of the decision-making process.
A great deal of time and energy is spent. A great deal of time and energy is spent
in acquiring information about an understanding that has been completed.
Advantages And Disadvantages Any contemplated action has its advantages and
disadvantages. The sponsor of a proposal should school himself
to consider advantages and disadvantages as impersonally as possible, because the economic advantage of a proposal depends upon its advantages and disadvantages in comparison with those of other alternatives.
The Threshold Idea There are degrees of action in a great many fields
below which the effect of the action Is insignificant. The threshold of success varies greatly for different
activities. The threshold idea should be taken into
consideration in evaluation engineering alternatives.
Raw Material substitutes What exactly is substitution?
The most obvious and simple example of substitution is the direct replacement of a material for another in a given application or process.
Example An example that everyone would have noticed
would be the use of plastic instead of glass for drinks bottles.
In the chemical industry, growing evidence of the toxicity of certain solvents e.g. benzene has driven a move to the use of more benign solvents e.g. toluene.
What is Raw Material? The raw materials are the basic materials from
which goods and products are made. Usually, raw materials are natural resources – for example oil, iron and wood are all common raw materials used in the production of goods and products.
Subcategories types for raw material
Direct raw materials are those which will be directly incorporated into the final product.
e.g. the wood used to build a table.
Direct Material
s
Indirect materials on the other hand are those which are consumed during the production process.
e.g. the lubricant, rags, light bulbs.
Indirect Material
s
Why raw material is substituted? There are a number of reasons why you
might want to find a replacement for a raw material you currently using.
It could be because the supplier can’t get you the ingredient.
You can save money on your formula. The product is no longer stable. For marketing reasons you want to change.
Steps for the substitution of raw materialUnderstand
what the ingredient does in the formula Find
potential replacements
Create prototypes
Test prototype functionality
Test prototype stability
The US EconomyEducation
Households and Consumption
Production
Government
Trade
The Economic Problems
What is an Economic Problem? In a broad sense, an economic problem can be
defined as an abnormal and irrational or irrelevant behavior by socio-economic units and
market components. market components signify 3 major constituents
of the market;
Demand Supply Price
Problems Meaning Scarcity Inflation Economic Bubble Recession List of Economic Challenges
List of Economic Challenges Anti-competitive
behavior, laws, and practices
Mass bankruptcy filings and insolvency
Economic bubbles and mass business failure
Child labor and improper child welfare development
Commercial crimes and intentional or planned corporate offenses
Corporate crime and planned economic turmoil
Corporate scandals Corruption Uncontrolled debt Financial disasters Government or
bureaucracy induced crisis
Mass economic inequality
Energy crisis Ethically disputed
business practices Financial crises
(restricted to the financial sector)
Uneven income distribution
Inflation
Market failure (component failure)
Monetary hegemony Monopoly Off shoring and
outsourcing Poverty Recessions Social inequality Stock market
crashes Unemployment Asset price inflation Economic collapse Economic mobility Economic stagnation Expenditure
cascades
Done