E X P E C T A T IO N s C H A P T E R S

II external assessment ( 80% ) n II microeconomics

er
42 marked outside of the school I II macroeconomics

- II internal assessment ( 205 ) s- I international economics

|
.

Tt
he marked by the teacher " " "" " " " " "" " " "

" Pare ' '

- and rarer - l " " )

Le exams

-17 II
↳

Porto folio
extended

of
response

3 commentaries
and data response

( 750 words )
§U
II semester exam ( 80% )

"

a
94 " 't

unit
'

test
hw '

(
a'

lo
stshmeht '

Y .
)
( 'O Y ' )

②
ou.to 8
THE FOUNDATIONS OF ECONOMY

a economic

° it
,

may
,,

not
a ,,

be
about

a
problem
resource

to
,

manage resources if you are alone , but if there is

②
Itg
^ "" " " " t" the" "" to ↳ " " " " " "" " "S" " " d"
" "" " "

manage and prevent those problems

° if the resources run out , there will be no invention or innovation , therefore

the chance of survival in the community is lower

t
F resources humans order to survive and evolve
can make us , do anything in

TERM
unlimited

:
SCARCITY
wants outweighs

,
OPPORTUNITY
the limited resources

COST
that we have

F)
Lf
↳ limited resources
,
LD the decision that you did not choose

unlimited wants

I mo.in?i......o..a++en.in...eseis+nesame
/
"

I .

/
-
for both Jody and Amy
I FREE GOODS

Lp goods with Zero opportunity cost

0 non free goods are economic Goods

o e.g ,
the air that we breath can be taken for granted

1 . dust

2 .
Sun light

3 .
etc

F- ACTORS OF PRODUCTION

'I in order to make something , you need to obtain the skills and knowledge

E NATURAL RESOURCES

( e.g salt oil )

-
chicken land etc
1-

f.o.A.i.es//
, , ,
, ,

"
HUMAN RESOURCES P RO D U CT

"
i :÷÷:÷÷÷:::i .

( ( ( intangible ) -1
e -
9 , equipment , money , etc ) tangible )
-

D ENTRE DR ENVER SHIP

( e. 9 , management ) - how are you managing the

company 7
L

- what skills do you need

ACTIVITY

/
#

/
service : household
china was 90T . Communist
1 land -
airbnb
.

in 1960
2 labour house owners interior design cleaning service
-
.

, -
,

3 .
capital -
money , permit ,

4 .

entrepreneurship -
management , customer service

FUN QUESTIONS OF ECONOMIC

DE MENTAL '

economic system
1 what to produce

/
. and how many
LEFT WING RIGHT WING
# \ I
' l
how to planned l l
free market
2 ,
produce r
l l
Command economic 1
, free competition

s . or whom it will be produced

system i i i ii. era ,

\ ,
/ l
capitalism
t
socialist l
l
'
communism
-1 I
, i -

T T -
\ I I
almost ,
every country works in the middle , l
l l l l
-

but some will lean more towards left

lhorthko-eaffchi.no#/VI//cana-da-/
or
right .

1- I
 PRODUCTION POSSIBILITY CURVES

II we want to produce as efficiently as possible

II
the
o
PPF ( production possibility frontiers )
shows the possibility
f-
curve
NN
r-
( OO
-
p

-
e
A
e inside the curve is not possible go •
- - - - - -
- -

l l l
l
l l

.. we
msn.a.we.p.au.ea.n.we.me a .
' l
, l l
l l l
l
H the curve is not fixed it ' i- 1- C
go •
- - - - - - - -
- - - -

l
l !
l
/
l l
l l
l l
D you have less
can resources than before -

40 Go so doughnut
LOO
is it changes into a more straight line instead of a curve

is Your PPE will shrink ( only X is possible )

D it can also expand ( y is how possible to do )

C ETE RIS PARI BUS

"
holding
" "
II means other things constant "

or
all other things being equal

II a form Ot assumption to the predictive purpose of scrutiny

I studying the cause and effect between two variables

NORMATIVE AND POSITIVE ECONOMICS

I
'
the chinese government put too little emphasis on curing employment

in 2004 ( normative economics )

A- the
unemployment rate in China for 2004 was 9.8% ( positive economics )

Chapter
TRADITIONAL MARKET

it the then the quantity from the customer decreases

g y,awoIy
II price is higher ,
-

demander
IT if the price goes lower , then the quantity bought by the customer increases -

II everything need to be consistent ,

especially the quality F

there are some

50kt po
exceptions for

conf
- - -

* demand curve is -
'

,
this
304
£
-
--
-
- - ow
,
I
usually decreasing ,

y
.
has
y
-

i
-

it
- -

therefore a
g
"
l
E

#
l
l
negative slope G '

Lok - - - - - - i - - - -
•

l l l
-
l
l l
l l
#i
100 300 400 500

auanlity bought ( Ks )
-

g.
"

•
I
sont

µ
you

30k

LOK
--

l
i
l
-

l l
-

-
-
-

-
-
-

-
-

Loo
---•€
-

•
l

l
l
-

-
-

200
;

l
l
l
-

300
-

l
i

l
-

-
-

400
q
-

;
l

l
- -

500
q
,
l

i
I

quantity ( ng )
CONCEPT

±,
it
-

goes
-

QUANTITY
lthe

down
OF

price

me

SUPPLY
SUPPLY

goes

go ,
his

↳
her

,
,

me
the

a.
quantity

an , ,

),-•\
sont

---€D
•
po
- - - - - - - -

I
1 I only applies in the X axis
(s)
-

curve
- 404 - -

÷ - -
• -

l
supply -

S l the
II supply is not same as
quantity suppl,
d l l l
304 - -
- -
I • - - -

,±→
>
demand ,± ,
.
sum , wand mean www.earnon.cn
⇐ w ,

l
came

e l l
,
l l
l l l

10K -
- - • -

T
- - -1 - - ooo

l l l
,
l
l l Q VA KIT IT Y DEMANDED
auantity ( Us )
to the axis
100 200 300 400 Soo tf only applies X -

↳ Some product ,
will not follow the I not
-

the same as demand

law of demand

I if it SUPPLY
-
is a
,

people would not demand it if the II the price of the product ,

-
-

people think that

price is too low is

f-
-17 controlled by the producers or
the quality went down
-

/
It people know the benefit sellers
ut what they are
-

buying o the farmers does not have power

i>
wTenl , are
combined
"
ehanse the prices a- their sods

together ,
it is called market as they have to follow the market
-

II market is the interaction between buyers price

-

↳ demand
goods the does
and
Seiler over cer tain and -
Is producers not have to pave
↳ supply -

services such as traditional market , to decide the price of a certain

-

D following the market

supermarket , online shop , as well as product ( a .cc . a price takers ) price

stock market II the behaviour of the producer

DEMAND

D the behaviour of the consumer

EQV LIBRIUM
EXCESS DEMAND

I allocated frequency II when the lower

price is ,

-
-

II the
point where the optimum the more quantity demanded
-

frequency of
quantity of resources
-
Lp does not happen in some

µa
cases such as luxury
is
effeciently placed goods
-

,.
g
I be when
can only achieved people buy and sell
- -
•
- - - -
#

* u.ua " , on , in + neon, ( rare , happen , ,

,
-
I
p

EXCESS SUPPLY '

i D
- 1 ¥

µ,
-
Pz
- - - -
-1--1/5- - - -
It a shortage occurs when demand
-

I
exceeds supply
i
- - - - -
-

notarizing tnepriaeiswwerthantne
o

I t # market eanlibrium

D
-

'
I
-

1 ! II in indonesia ,
the sore -ment
# I

decides the price of the rice

I
II happens when the government I but then , more company
°
the farmers don't set enough

se"sher will be less attracted money - therefore we hate

what it actually costs to employ them to import goods such as

-

It P1 will Kareena Kebdnyakan rice

i attract more people -1,

to work and produce Orang

Surplus is created when supply P Rl CE MECHAM SM

- -

exceeds demand because the II invisible hand

-

price is higher than the 'I talks about the market and indicate , that
#

market equilibrium it is not a fixed thing ( dynamic )

-

II that is why tf most demand and supply will shift

people
→

Come II in lebaron the

to jakarta , prices goes higher because

because of the hish there is more demand since people are

that attract soils back to their hometown

salary

people
 SHIFTS IN EQVLIBRIVM

II the optimum price changes due

-

f- µ-1!
to higher demand
S
-

H usually happens during festive

µ/
seasons like lebaron or
Christmas )
- - -
- - - -

l
A

\
"
"
- - - -

! " advertisement would also Affect

I

; p .

we demand , increase or decrease ,

l
- ,
l l
1 ,
D1 II when the income increases or decrease
#
l l
demand would be higher or lower
the

µyyI
DEMAND CURVE
#

II
price of cer tain Sood s stay , the same
-
-

as the auantity demanded Chan Ses

, . aem.na.u.ne.n.n.mn#
. .
' t t
,
i DL =
original
,
I I
#

0-3 Q1 Q2 Dz =
increasing

Dz =
decreasing

,µ,,. -
Sz SHIFTS IN EQVLIBRIUM

\
S

B II non related factors

Sz
-

price can affect the

4 - - - -

price production
l
l
II we assume that the quality and
quantity is the
z l l
#

l l
l same ,
while the price changes
l l
l

1.10
-

l
l D
l tf what may shift the supply i

30 40 SO GO
20
°
weather ( especially on natural resources )

o ability and willingness

xt
o natural disasters

°
Population ( less strength = less production )

F- O
competition ( less competition i less supply )

II only shifts to the left or to the risht

MOM
-

PRICE RELATED GOODS

II income A trends A
variants or products
-
- -

H
demographic I
advertisement 'I
adding factors of production
-

A A
price related goods government policy
-
NON -

PRICE DETERMINAIYTS OF SUPPLY

IT factory /
cost of of production II averment intervention it time seasons
-

II advanced in technology 'I

competitors and market share
- -

II
price of related goods 'I
work force / labour

A
expectation / target
'I
geographies and demographics
-

UNIT TEST PRACTICE

1 .
( what happens when the people stops buying palm oil )

FACT
+ Indonesia and Malaysia account for 85% of the palm oil global production

PROBLEM

council of palm oil producing countries said Indonesia and Malaysia will jointly seek
+

( WTO EU
justice at the world trade organization ) as the
presses on to ban palm oil

NOTE : make a diagram when a question line this comes up

D1
-

µ
b before the EU
S
-

stops buying
-
↳ palm oil

-
t the demand decreases

newea.i.wi.m.p.eu.

=¥
-
l b new price = diff .
demand

.mn#tphsebuy.ng + gupp , , stay , the game a, begone

|
-1 MARKET OF PALM OIL

2 ,
if canola oil has the same purpose as palm oil ,
what would happen d

to the market of canola oil

¥
-

\
S

Ds
-

-#
 CONSUMER AND PRODUCER SURPLUS

÷÷÷¥:""e /
- - - - =
social welfare
Supply H has nothing to do with excess sappy
$2
A
consumer surplus
-

consumer
$1.50
surplus or some people will be willing to pay $2

"

. ::÷÷÷ :O . . . . . .me ..

I #

willing to by b some cases will contradict this

demand
-

I
#
-

II demand is also called marginal social benefit

producer surphs I
if the consumer pays $ 2 . then they will

/
-

II some producer are more efficient set a $ 1 surplus

than others
Pwdgict o if
.xso . they set a
$o
It to the
they are willing sell apple Su -
plus
-
-

for I
low brice →
the sum of the su -
phs will be the area of

/
#
#
#

°
there is no point on making the consumer surplus or producer surplus triangle
-

the price cheaper ( sells at II the consumer surplus is the ones who are willing to
-17
- -

although they would

market
price ) market
pay more than the price
gain profit due to increasing
-

demand
A supply is also called marginal o in the end , they pay only for the market price

social cost

Allocate freauency the

tf
happens when the consumer surplus and producer surplus

are both maximize

a it the goods sold be

are at market price , they will maximize

consumer surplus i
refers to the benefits that the buyers set when purchasing
extra
-

a product for less than they are willing to do

- -

producer surplus : the difference in price that firms receive us .

the price they're

willing to
supply at ( the profit they get than they were to sell the product at )

HOW TO ANSWER QUESTION

II understand the auction

II define the terms ( try your best )

II implicitly , you have to draw diagram ( with correct and complete label )

II explain the diagram that you made ( explain with reference )

 I give example , to support your answers ( be specific )
II make a conclusion

PRACTICE QUESTION

f*
Price

-
S
,
-

Pz

S2

" -

1
I
I
IT
-1
I 1711
# Quantity

QUIZ 1
-

1 .
explain how the price mechanism allocates resources in an
economy

II define price mechanism

°
a system where the force , of demand and
supply determine

the price of a commodity and how the price change lead .

to a reallocation of resources

II diagram ( demand and supply ) to show how price change, lead

to a reallocation of resources

Sz hams ada shifthya

÷t
o
Supa l a
-

t
Sz tceliatan the change, in economy

I
, Dz
l l
#

Q2 Q ,
auantity

II
explanation of how the signalling function of price allocates resources

when price change, and changing its market conditions -

b CONCEPT

A
example to show the signalling and incentive function , at price

-
D EXAMPLE IS A MUST
I

| /
GUIDE N CE

D 9 -
(O points fur answer

0 C- tear understanding of the specific demand of the question

: ::÷: :c:÷:::÷:::÷:÷ . . ....

o where appropriate ,
diagrams are included and applied efficiently

°
where appropriate , examples are used effectively

o there are no significant errors

2 that
.
explain when producer surplus and consumer surplus are maximized

, allocation efficiency is achieved

It definition , Ot allocate
consumer surplus ,
producer rurphs ,
and
efficiency

II
diagram to show producer and consumer surplus and allocate've etfiency

-
11 -

3 .
II
'
definitions of
demand and supply

II diagrams to show the impact of

changes in the determinants of

demand and supply ( AT LEAST 2 DIAGRAMS ) increase t decrease of price

It on explanation of how new of rice would result

a
price

from an increase in supply and demand

increase in
,
with

determinants
reference with specific

A- examples of situations where such changes have taken place

chapter
ELASTICITIES

IT to the
refers economical / market force
price
f-
It
types -
D PED ,
-
XED , TED , DES
- - -
- -
-
-

the of
1st 2nd
El elasticity is responsiveness -
toward a change in
-

X -
axis Y -
axis

o depends on what type you're using

last letter X axis first letter

:
y axis
- -
-
, .
PED b the responsiveness of quantity demand toward a change in the price

of auantity demand towards in

XED D the responsiveness a change the price of

the product

YE D D the
responsiveness of auantify demand towards a
change in the

persons income

PE S is the
responsiveness of auantity supply towards a change in price of the product

I /
FORMULA

%¥p
'
' '' ' → '' ' ' →

I XED D % A GD II PES %
'
- - D D QS
- -

% I % D P
-

II calculation example ,

"I i÷÷-I1k"::÷
P, =
100 -22 Qd ,
=
7000 Pi i 2000 -13 Qd , =
So

Pz = 150 - b Qd e s Soo Pei 1,800 - b Qdz = 75

- -

2
I PRACTICE

P ,
i
S - D Qd , = GO

Pz = 4 - so -
D Qdz = 72
REVENUE BOX

€#!
a) 4. So S o s d )

I
-

- - -

to %
-
'

× 100 l .
= -

s - - - - -
-

g- q
d l
v " s - -

T
- - - - -
- -
'

I E .
72 -
Go =
× too % = - zo y .

Go l

b ) ( Go -
721 Go 1100 =
-

zo y . =
-
z
Go 7- S
- -
quantity
(S -
4. So / s ) too 10 Y .

c ) Rs p x q e ) Yes r the firm is sensible to lower

S X 60 b 4 So the price of the

= X 72 pizza it increased
- -

as

= 300 -
D 324 the quantity demand from the customer

= 324 300 D
- -
24
 PRI CE UN ELASTIC : the quantity demand would not have a lot of impact

( it's
when the price changes e .g , rice ) maybe because a
necessity

PRICE ELASTIC = the quantity demand would be greatly affected by the

price change of the product ( luxury goods , etc )

Ei
II in the elastic diagram ,
if You

\
increase the price you will have less
elastic
,

less revenue than when decrease the

you
revenue

Price

\
I in the inelastic diagram if you decrease
① ,

u revenue Kalo
"
more
6 Inelastic
• increase the price the price you will get more revenue than

when you increase the price

'I
the elasticity depends on the what price
#

quantity demand
point correspond , to the curve
or

oft
-

↳ a certain point

H P PL ( CA T 1 ON S OF P E D

II how much the quantity demanded changed due to the change in

the price of product

it for commodities PED is for manufactured product

many ,
relatively low and ,

the PED is hi Sh
relatively

CI in order to gain as much profit as possible the must increase

, company or

decrease the price where it will get the most Quantity demand

II REVENUE BOX
- - -
s

¥
-

4/11
91 II PED I demand D
'
lo DG larger
> is elastic is
- -

-
1111
- - -

$
I I 1
% A Q
.

demand D
b II O S PED inelastic is
-

C l -
is smar ter
,

, y,
-

;
-

, pep . , → un ;+a, e. am .
.
* man , → % , a , .
e.ua ,

€1
-
- - - - - I - -

""".# d
-

" ,
tf PED -
D D - is infinitely elastic demand - D To DQ is infinite
# I

a PED -
O - p perfect inelastic demand - D % D Q is
zero

II " " "" " "" " " " "" "" " " " " " " " "" " "" " " °

µµ
"
 QUESTION i

explain three price determinants of price elasticity of demand ( PED ) ( IO marks )

→ define elasticity

(n ) .
. . .
-
D determinants

#
PES 'I the desire of necessity

'I
length ot time
PED XED YED
-
D
define PED ( h .
) . . .
It the number and closeness of snbtitute ,

→
graph 1 .
product substitutes I proportion of income spent on the goods

2 .

X ED

it when price of a certain product rises ,

the quantity demand can decrease

III the responsiveness

of demand of one product following a change in

the price of another

product

I XED i
% change in auanlity demand XED > 0 substitute good ) ( t )
-

XED C O complementary goods ( -

)
To change in price of product

*
the greater the absolute value of the XED i
o unrelated products ( O )

XED ,
the greater the sustainably /

complementary of the product is

COMPLEMENTARY

II close complements

I wear complements

|
" "

0 a small fall in price drop in

.
o a large price

µ
Pz -
-
L - - -
p, - - - -

,
l
I Ot A cause , a large Ot E
cause, only

;
, m ,
in
me * man , p. ,

a . man , n , ,e , we

'
' ' '
Ot B demand for F
I
l l l
-

-1
Q1 Q2 Gi Q2
SUB TI T VARY

'I
close sublitnte ) I weak substitute ,

o small rise in the price

'

o large rise In the

la-se
pz -1 price
-

leads
-

cause , rise
- -

ot x of s to

"
'

pi '
in the demand for Y
p ,
small increase ot T

' ' '

" ' '
l
l l
i l

Qi Gz Qi Q2

PRACTICE *
D Pepsi drops toy .
P contact tense price = t 2.45

drops 8 l
'

D Coca -
Cola . = 2.45 '

- X 100 l .

24.50
D XED %
'
i
D Gd =
-
10 I
.
= 1.25
-
-

-
8% 10%
y . g p =

P that mean , that the relationship between D contact tense Qb =

-
z s

Coca -
Cola and pepsi is substitute as they are i -
25
- X COO 's .

225
similar products

11
-

s -

D XED =
11% I I
-

= -

,
-

IO 's .

D therefore , the relationship between

the two is strictly complementary

YED

IIF the responsiveness of demand of one product following

a change in income

'I YED = % change in quantity demanded

-

'
I .
change in income

YED normal ( luxuries ) ( income elastic demand )

}
S O goods
( t )
OE YED Ll normal goods ( necessities ) ( income inelastic demand )

YED i 0 inferior goods ( -

)
PRACTICE B

D income = -
20K

= -
20 D YEP i t . D GD
X 100
q
-

T . D Y

= 20 Y
25 % t
- .

D -
o .
i . D QD
-

3T
auantity
.

D =
-
in

demand
,
-
, ooo p - O -
755 . =
'
l . D QD I
× lot n

µ
= - LO Y .

" " =
- as
-

p the relationship is based on normal goods .

However ,
because the value is not more than 1 ,

it is a necessity U
l
.

t
In of
"
y

f
so

'

"

¥÷
hntdto
HE at -

da