Chapter 1

Economisc : the study of how society uses its scarce resources to produce goods and services

Goods: goods are tangible and visible manmade or natural products being on sale in market.

Services : are intangible and invisible things which result from useful work done by people for people in the market

Economic resources are are the things that go into the making goods and services. There are 3 kinds: natural, human and capital resources.

Natural resources : all things from natural world that serve as raw material input for production of goods and services : air and water, trees, plants…

Human resources: consist of all active population of a country. In other words, they are at the working age except disabled and handicapped people.

Capital resources are both producible and reproducible things which are used to produce goods and services. physical capital : tools, money, building, machines / invisible capital : kwowhow, brandname, technology and trademark.

Entrepreneur : refers to skills of people who are willing to invest their time and money to run a business

Economic/ business cycle is the periodic changes or ups and downs in the level if a nation’s economic activity.

Recession : a downturn – real GDP declines suy thoái

Bottom/trough : real GDP reaches its minimum

Recovery : an upturn – real GDP rises

Peak : real GDP reaches its maximum.

GNP:  the gross national production tells the total value of all the goods and services produced in a nation in a single year.

A scarce resource : one for which the demand at a zero price would excess the available supply

Scarcity : means that society has limited resources and therefore cannot produce all the goods and services people wish to have

Opportunity cost : of an item is what you give up to obtain that item.

Trade off : to get one thing, we usually have to give up another thing. 

Chapter 2 :

Economic system: the way that a group, community of people or nation organizes itself for production

There are 4 main kinds of economic system.

Traditional economic system is the economic system in which all economic activities are inherited from generation to generation .the ways of production remain unchanged (South American, Asia, Africa)

Avd: clear economic roles. More experts, skillful workers.good know how => transfer from the old to young.

Dis :lose of freedom of choice.backward

What: have a set of products.product can be diversified according to the price

How: particular the knowhow new technology rarely applied here.output.knowhow

For whom: production and distribution. Don’t need advertise

Market economic system:

In which nation’s economic decisions are the result of individual decisions by buyers and sellers in the market place. People are free to go into business on their own

Command economic system: is an economic system in which all economic decisions are done by the government. 

Mixed market economic: . is an economic system in which the production, pricing and distribution of goods and services are determined by the government rather than market forces

Macroeconomics : the branch of economics that considers the relationships among broad economic aggregates such as national income, total volumes of saving, investment , consumption expenditure , employment and money supply. It is also concerned with determinants of the magnitudes of these aggregates and their rates of change over time

Microeconomics : the branch of economics concerned with individual decision units – firms and households  - and the way in which their decisions interact to determine relative prices of goods and factors of production and how much of these will be bought and sold . the market is the central concept in microeconomics

Economic growth: an increase in the nation’s capacity to produce goods and services.

Economic indicators:

GNP: GDP + net income from within and outside of a country by the country’s business for final use during a year.

GDP: total market value of all goods and services produced within a countries borders for final use during a year.

Personal income: is the total income received in one year by all families and individuals in the country

Inflation: is the increase in general price level in a year compared with it in the previous year

Unemployment rate: is the percentage of the active population that is unemployed

Stock market average: is used to express stock market prices in the stock exchange

Chapter 3:

Private property : the right of individuals to exercise control  over things owned .

Output is goods and services produced by society

Input is the productive resources an economic uses to produce goods and services

Capital all manmade inputs used in the production process ( tools, machinery, and physical plants)

Labour anyone who works paid work

Labor is the brain power and muscle power of human beings

Entrepreneurship : refers to the innovating , organizing and risk- taking activities of individuals and firms that create new products and new markets.

Ownership : is the right given to individuals and firms by law to possess , employ, rent and transfer means ò production á they wish

Capitalism : is the political and economic philosophy characterized by marketplace competition and private owenership of business

Communism is a social , political and economic philosophy in which the government controls the factors of production. There is no financial incentive for people to increase their productivity because the government regulates and assigns

Socialist countries have an increased amount of government involvement in the economy, but the market is not completely controlled. The state will generally control noncompetitive companies in areas

Mixed market economy that are a mixture of both capitalist and socialist economies. Most developing countries have mixed system. Their essential feature is the coexistence of substantial private and public activity within a single economy.

Price : is  a unit of money or another kind of goods paid for a unit of product

Wage income : the price for an hour of labour

a salary is the price for a month or a year’s worth of labour

A rent is the price for the use of a house for a month

Market : the entire enterprise of buying and selling goods and services at a particular location or at geographically dispersed locations

Market : a self – coordinating mechanism which adjusts the behaviors of sellers and buyers on the basis of prices.

Transfers payment : payments made to individuals without requiring provison of any service in return

Chapter 4:

Demand : amount of goods and services that consumers are willing and able to purchase at conceivable prices or in a range of prices

A demand schedule show how much of a good or service consumers will want to buy at different prices

Law of demand : states that when the price of a good rises and everything else remains the same , the quantity of the good demanded will fall .they have inverse relation.

Consumers try to economize/ find substitutes  ( price tang => luowng mua giam)

Buy more to store for future use / find different  (nguoc lại)

Demand curve : always slope downward from the left to the right.

Excess demand: the situation in which the quantity demanded at a given price exceeds the quantity supplied ( vuowtj cauf) => shortage

Supply : the amount of goods and services which are offered for sale at conceivable prices or in a range of prices

A supply schedule shows how much of a good or service would be supplied at different prices

Law of supply : states that when the price of a good rises and everything else remains the same , the quantity of the good supplied will rise.

sellers expand product to gain profits/more producers join in the market.(gias tawng)

contradict their product limit inventories => limit loss/ a lot of proceducers change to produce the other products.

Excess supply: quantity supplied > quantity of demanded => surplus

Market price: is the one at which the quantity demanded is equal to the quantity of supplied

1.      roles of the government 

Market economic system : is an economic system in which the production, pricing and distribution of goods and services are determined by the government rather than market forces

However, no economy can exist and develop well without the government

P1. The G can act as the provider of goods and services

-          provides goods and services for poor, the disable

-          pays for many social services such as military service, defense service and medical service

-          sometimes , give transfer payments

-           

p2. The G is a helper of weak business groups and an organizer of income allocation

-          Help the weak business groups to develop by many ways such as providing capital and technology as well as levying tariffs and taxes on the strong business groups

-          Allocates income in the society

P3. Acts as stabilizer in the market

-          Create jobs to unemployment

-          Narrow the gap between the rich and the poor

-          Narrow gap between rural and urban areas

P4. Acts as the producer of goods and services in the absence of the business venture

-          Business always do business to seek for their self- intersect

-          However, the role of G is to satisfy all the consumer’s demand

In conclusion

3. Advantages and disadvantages of different kinds of business organizations:

Introduction: 3 types of business organizations: proprietorship, partnership and corporation. Each types has its own advs and disadvs

Body:

P1: What is a proprietorship?

-          Advs:

+ very easy to set up and close down and requires low cost of formation

+ offers its owners freedom

-          Disadvs: limited life, limited abilities, limited funds and unlimited liability

What is unlimited liability?

 P2: What is a partnership?

-          Advs of a partnership

+ also easy to set up and close down

+ more experience and knowledge than a sole proprietorship

-          Disadvs: limited fund, limited life, unlimited liability and disagreement among partners. In this kind of business organization,  every partner is responsible for debts of the business.

P3: What is a corporation? A corporation is a business that is licensed by a state or a federal government

-          Advantages over the other two kinds of business organizations: unlimited life, limited liability, easy transfer of the ownership and fund raising.

+ the business has to pay the debts, not people who own it.

+ that ownership can be transferred to another person by selling shares of stocks

-          Disadvantages:

+ very complicated and expensive to set up

+ it is subject to double taxation: first, the corporate income tax and second, personal income tax paid by its stockholders.

In conclusion

4, Studying economics is studying the way to get rich

Introduction:  What is economic? Economics is the study of how society uses its scarce resources to produce goods and services.

-          Some people argue that studying economics is studying the way to get rich.

-          Agree with it

Body

P1: Give us background knowledge to solve our basic economic issues.

-          Know economic resources: natural resources, human resources, capital resources are limited, but demand is not limited => make economic choices. But how to have the best choice without having good or at least basic economic knowledge.

P2: Know how to invest our capital: learn about different kinds of businesses, their advantages and disadvantages => choose the kind of business that is most suitable and make it easy to be successful in the business

P3: Know to deal with the shortage of goods.

In conclusion

5, How do prices in the market determine the answer of basic economic questions?

Introduction: what is price? Price is a unit of money or another kind of goods paid for a unit of product

-          Plays an important role in the buying and selling process

-          Help to determine answer of basic economic questions: what, how and for who to produce

Body:

P1: What to produce

-          Price increases, producers => produce more => increase their profit. Other people => be attracted into business => gain profit

-          Price decreases, producers minimize their production or change to produce other goods.

P2: how to produce

-          Producers compete => attract more consumers => reduce the product price => make their production efficient => save raw materials, reduce production cost

P3: for whom to produce

When selling  products, producers and sellers set the price.

-          If too high, few consumers can afford => hard for them to sell out their products or gain as much profit as expected.

-          If too low, a lot of people afford => worry about the quality of the product. That’s why, producers and sellers have to find out the price that can satisfy both consumers and them.

In conclusion

6. Why are market prices fluctuating but not fixed in a market economy? What makes prices change?

Introduction: What is the market price? Is the one at which the quantity demanded is equal to the quantity supplied.

-          Supply and demand are two decisive factors in determining the market price

-          Changes in supply and demand make their prices fluctuate

Body:

P1: Demand

-          What is demand affected by?

+ prices of related goods including compliments and substitutes. What are compliments and substitutes?

P2: supply

-          What is supply influenced by?

+ Technology. How?

+ Input cost. How?

+ Government regulations. How?

In conclusion

7. What is economics about? Why do people, businesses and government have to make economic choices?

Introduction: a lot of economists have different definitions on economics.

-          What is economic? Is the study of how society uses its scarce resources to produce goods and services.

-          It is obvious => has to make economic choices => understand such an issue => think of two below important factors

Body:

P1: doing any business activity => need one or all economic resources including capital, human and natural ones.

+ what are natural resources? All things from the natural world that serve as raw material input for production of goods and services

+ what are human resources? Consists of all active population of a country. In other words, they are at the working age except disabled and handicapped people

+ what are capital resources? Are both producible and reproducible things which are used to produce goods and services

+ are they limited or not?

P2: our demand consists of needs and wants

-          Are they limited or not?

-          When satisfy one demand, others appear immediately => make economic choices

-          Whenever make an economic choice, there is an opportunity cost to us in terms of what we have to give up or trade off in order to get whatever we select.

In conclusion

8. Three economic systems:

Introduction: what is an economic system?

-          3 types of economic systems: traditional, market and command ones. Each economic system has its own way to answer basic economic questions

Body:

P1: What is traditional economic system?

Functions: answer to all basic economic questions => the habit and custom.

+ produces goods and services in traditional ways

+ producers group

+ consumers look for producers/sellers to purchase products

P2: what is a command economic system?

Functions: decides product to businesses through the production quota.

+ food stamp system => distributes goods and services to consumers

+ state-run company => capital invested by the Gov.

P3: what is a market economic system?

Functions: do market research => consumers’ demand for the product

-          Businesses => reduce their product price => apply new technology, purchase new machines => their production efficient

-          Attract consumers => doing marketing, giving promotion

In conclusion