The Economic Problem经济问题.ppt

The Economic Problem Content Nature and Purpose of Economic Activity Economic resources Economic objectives of: Individuals Firms Governments Scarcity, choice and allocation of resources Opportunity cost Value judgements Nature and Purpose Of Economic Activity The central purpose of economic activity is the production of goods and services to satisfy needs and wants Goods are tangible products e.g. a car, a loaf of bread Services are intangible e.g. a haircut, an aeroplane flight Needs are basic requirements people need to survive e.g. food, shelter Wants are things that people desire e.g. a sports car Economic Resources Key resources that businesses use are: Land Labour Capital Enterprise Land refers to all naturally occurring resources used to produce goods and services Labour is the measure of work done by humans to produce goods and services Capital is the money or wealth used to create goods and services Enterprise refers to the entrepreneurial skills and abilities that allow risks to be taken and profits to be earned Economic Objectives Economic objectives are the targets that are set by individuals / firms / governments to achieve All bodies pursue maximising objectives which aim to get the most out of what they do Firms are regarded as profit maximisers who attempt to maximise shareholder value and generate funds to support growth Individuals Firms Governments Economic objectives of individuals Different individuals will have differing objectives Employees will seek high wages Shareholders desire maximum profits and dividends Employers want maximum profits and minimum costs Economic Objectives Of Firms Firms are regarded as profit maximisers who attempt to maximise shareholder value and generate funds to support growth Other key objectives include: Growth by increasing sales / market share Survival Economic Objectives of Governments The governments major objectives are: Full employment or low unemployment Price stability High and sustainable e