Free Economics Notes
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About this ebook
This free eBook contains the following chapters
1 An Introduction to Economics in 5,000 Words and a Bit
2 Trying to Make Sense of Economic Policy—What Do Governments Try to Do?
3 Trying to Make Sense of Economic Policy—Why is it Difficult to Get it Right?
4 Business Cycles, Recessions and Economic Booms
5 A Summary of the Advantages and Disadvantages of the Price Mechanism
6 The Difference Between “Economic Growth” & "Economic Developmen"
The level varies from pre-university to undergraduate.
Kevin Bucknall
I have worked at London University, Griffith University (Australia) and with the United Nations in Bangkok. I have lived in a variety of countries, including Australia, Canada, Hong Kong, Malaysia, Singapore, Thailand and the UK. Recently I spend much of my time writing about motivation and study skills and also making videos about Chinese and Japanese culture. I also "entertain" the neighbours by practising the clarinet in order to keep my place as the lowliest clarinet player in the Da Capo concert band in London.
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Free Economics Notes - Kevin Bucknall
Free Economics Notes
By Kevin Bucknall BSc(Econ), PhD
Copyright 2012 Kevin Bucknall
Published by Kewei Press at Smashwords
ISBN 978-0-9561823-3-3
The cover photograph was taken in Japan during the Meiji period by the famous Japanese photographer Enami about 1892-95. It shows women winding silk in what seems to be cottage industry. Photograph by courtesy of http://www.t-enami.org/services
Smashwords Edition License Notes
Thank you for downloading this free eBook. You are welcome to share it with your friends. This book may be reproduced, copied and distributed for non-commercial purposes, provided the book remains in its complete original form. If you enjoyed this book, please return to Smashwords.com to discover other free works by Kevin Bucknall, such as:
You Too Can Study More Easily: Tips for Dummies and Others
Connect with me online:
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Facebook: http://www.facebook.com/kevin.bucknall.3
My wish for you: may you achieve all that you want in life and remember - it’s worth working hard to get it!
~~~
Contents
Chapter 1 An Introduction to Economics in 5,000 Words and a Bit
Chapter 2 Trying to Make Sense of Economic Policy—Part 1: What Do Governments Try to Do?
Chapter 3 Trying to Make Sense of Economic Policy—Part 2: Why is it so Difficult to Get it Right?
Chapter 4 Business Cycles, Recessions and Economic Booms
Chapter 5 Understanding Economics: a Summary of the Advantages and Disadvantages of the Price Mechanism
Chapter 6 Notes on the Difference Between Economic Growth
and Economic Development
A free sample from the book Going to University: the Secrets of Success
Other books by this author
Videos by this author
~~~
Introduction
This free eBook is a collected set of articles and notes about economics that I wrote over the years to help my students. Some of the material was prepared for students at school who were working towards university entrance; some was designed for students who were already studying at university at the undergraduate level and, in the case of the research chapter, at the postgraduate level. You can pick and choose what interests you and concentrate on what you find useful. The search function in eBook readers and word processors is pretty good for finding what you need. I hope you find at least some of it both interesting and useful.
~~~
Chapter 1 An Introduction to Economics in 5,000 Words and a Bit
Authors Note
Many years ago when I was doing research as a Visiting Associate Member at St. Antony's College, Oxford, I shared a house with several grad students from various different disciplines who were studying for their D.Phil. I was struck by the number who asked me what economics was about and would I please write an elementary piece some day, so that an intelligent and well-educated person could learn what it was about. I never forgot. This chapter is a simple introduction to the discipline, or at least as simple as I can make it. Economics courses tend to contain a lot of mathematics or a lot of diagrams, or both. This chapter uses neither. It might be useful to you if you are similarly intellectually curious; or if you are just starting a course in economics and looking for an easy overview; or perhaps are contemplating studying the subject and wondering what the heck you might be getting into. If it interests you and you would like to learn more, please check out my free book An Introduction to Economics that sticks to using diagrams with only the tiniest bit of algebra in one small section.
What is economics?
Economics is a subject notoriously difficult to define clearly for outsiders: a formal definition might be that it is a social science that deals with the production, consumption and distribution of goods and services. In simpler terms it deals with how people produce and work, in order to survive in this world. Mainstream economics covers things such as how prices are determined in the market; how best to organise the economy for efficiency and growth, and what sort of things can prevent a perfect solution; how wages are determined; what causes undesirable events like inflation and unemployment and what can be done about them; and how and why countries interact through foreign trade and foreign investment.
Sciences attempt to be value-free and objective; economics is no exception, and for this reason words like ought
or should
tend to be avoided, as they are normative
and the discipline sticks to facts which are positive
. It has to be confessed that it is harder to be completely objective in the social sciences, dealing as they do with human beings and their behaviour, than in the natural sciences, most of which are concerned with the inanimate world and non-human life forms.
In life we constantly make choices and each time we decide to do something, let us call it X
, then we choose not to do something else, we can call Y
. Economists refer to this as the opportunity cost, i.e., what is given up to get what is actually chosen. It is most clearly seen when constructing a budget and deciding how to allocate money between competing uses, but it applies everywhere. Opportunity cost lies behind all financial cost calculations and cost curve diagrams: the cost of buying is the amount of money that has to be paid by person A to get to use the stuff (iron ore, the service of a worker, a delivery truck...) rather than let someone else (person B) use it.
The study of the economy is traditionally divided into two sections, microeconomics, which looks at a bit of the economy (think of looking down a microscope at something small), especially prices, what firms decide to do about price and output decisions, and wage determination. Then there is macroeconomics, which looks at the entire economy and as such is concerned with things like the size of total output, the level of inflation, the amount of unemployment, and foreign trade. We will look at these in turn.
Microeconomics: the determination of prices in the market and the system known as the price mechanism or the market mechanism
When I started out in economics we students used to be taught to chant in unison Prices are determined by supply and demand
and no doubt some still are. If we think of some item (again we shall call it X) if no one wants it at all, then it has no price—there simply is no demand. Probably a wrecked and burnt out car would fit this description. If some people actually want X then it will have a price, as whoever owns X can sell it and use the proceeds for some purpose or other. Will the price be high or low? It all depends on