the various changing factors which influence it.Theseinclude investment levels,the multiplier effect,inflation.savings,confidence.interest rates andexchange rates Equilibrium national incme is determined using aggregate supply and aggregate demand analysis. Business cycles or trade cycles are the continual sequence of rapid growth in national income.followedby a slow-down in growth and then a fall in national income.After this recession comes growth again,and when this has reached a peak,the ycle turs into recession once more High rates of inflationare conomy.Inflation redistributes income and wealth Uncertaintyabout the value of money makes business planning more difficult.Constantly changing prices imposeextra costs Demand pull inflation arises from an excess of aggregate demand over the productive capacity of theeconomy A surplus or deficit on the balance of payments usually means a surplus or deficit on the currentaccount 2.基本概念和知识点Basic concepts ,Unemployment,Stagnation,Interationl payments, monetary policy 3.问题与应用Questions and applications The government of counry C provides free medical treatment to all its citizens.However. for more affluent citizens,asmall charge is made if they need medication.The government has recenty decided this charge by a moderate amount to refect the increasing cost of the medicines Cost push infation arises from increases in the costs of production. The number of unemployed at any time is measured by government statistics Economic growth may be measured by increases in the real gross national product(GNP per head ofthe population. policy objectives relate growth,infati unemployment and the balanceof pavments. Fiscal policy provides a method of managing aggregate demand in the economy If a government decides to use fiscal policy to influence demand in the economy,it can choose eitherexpenditure changes or tax changes as its policy instrument A government must decide how it intends to raise tax revenues.from direct or indirect taxes and inwhat proportionstax revenues will be raised from each sour Direct taxes have the quality of being progressive or proportional.Income tax is usually progressivewith high rates of charged on higher bands of taabe incme. can be regressive,when the taxes are placed on essential commodities or commodities consumed by poorer people ingreater quantities Monetary policy uses money supply,interest rates or credit controls to influence aggregate 11
11 the various changing factors which influence it. Theseinclude investment levels, the multiplier effect, inflation, savings, confidence, interest rates andexchange rates. Equilibrium national income is determined using aggregate supply and aggregate demand analysis. Business cycles or trade cycles are the continual sequence of rapid growth in national income, followedby a slow-down in growth and then a fall in national income. After this recession comes growth again,and when this has reached a peak, the cycle turns into recession once more. High rates of inflation are harmful to an economy. Inflation redistributes income and wealth. Uncertaintyabout the value of money makes business planning more difficult. Constantly changing prices imposeextra costs. Demand pull inflation arises from an excess of aggregate demand over the productive capacity of theeconomy. A surplus or deficit on the balance of payments usually means a surplus or deficit on the currentaccount. 2.基本概念和知识点 Basic concepts Inflation, Unemployment, Stagnation, International payments, disequilibrium, fiscal and monetary policy 3. 问题与应用 Questions and applications The government of country C provides free medical treatment to all its citizens. However, for more affluent citizens, a small charge is made if they need medication. The government has recently decided to increase this charge by a moderate amount to reflect the increasing cost of the medicines. Cost push inflation arises from increases in the costs of production. The number of unemployed at any time is measured by government statistics. Economic growth may be measured by increases in the real gross national product (GNP) per head ofthe population. Macroeconomic policy objectives relate to economic growth, inflation, unemployment and the balanceof payments. Fiscal policy provides a method of managing aggregate demand in the economy. If a government decides to use fiscal policy to influence demand in the economy, it can choose eitherexpenditure changes or tax changes as its policy instrument. A government must decide how it intends to raise tax revenues, from direct or indirect taxes, and inwhat proportions tax revenues will be raised from each source. Direct taxes have the quality of being progressive or proportional. Income tax is usually progressive,with high rates of tax charged on higher bands of taxable income. Indirect taxes can be regressive,when the taxes are placed on essential commodities or commodities consumed by poorer people ingreater quantities. Monetary policy uses money supply, interest rates or credit controls to influence aggregate
demand.The balance of payments accounts consist of a current account with visibles and invisibles section andtransactions in capital (external assets and liabilities including officia financing) (三)思考与实践Chapter questions and practices (1)The government of country C provides free medical treatment toall itscitizens.However. for more affluent citizens,a small charge is made if they need medication.The government has recently decided to increase thischarge by a moderate amount to reflect the increasing cost of the medicines. What effect is this likely to have on the demand for medicine within country C? >This is unlikely to significantly affect the demand for medicine.This is because medicine is likely to be highly inelastic.Given that the medicines are likely to be seen as a necessity for most individuals,citizens are likely to continue paying for their The price of the medicines is currently low and only applies to the wealthier citizens. This means that these payments will only represent a small proportion of their income again suggesting a low elasticity of demand. Also given the relatively low prices charged by the it tha citizens will be able to find cheaper substitutes.This would indicate that they will continue tobuy the medicines at the higher prices The increase will presumably be long in duration.This would normally mean that consumers have more time to find alternatives,leading to ncreased elasticity and a fall in demand.However,given the other factors already mentioned.on balance there is likely to be little change in the level ofdemand (2)The government of country F has decided to impose a minimum wage for all workers.which is above the current average market labour rate Which of the following isa potential consquence of this? A Rising employment within country F B Falling costs of manufacturing in country F C Lower selling prices,leading to higher demand DSurplusof labour created within country F >D (3)Suppose we increase the number of workers while keeping the numberof machines constant Initially the extra workers will allow specializationand increased efficiency.This will cause average costs to fall. As we keep adding staff.however.they will eventually start getting ineach other's way and having to wait to access machines.The systemtherefore becomes less efficient and the average production costs willbegin to rise. (4)As a business grows,the number of units it produces will increase.Thismeans that in the shor term,the average cost of factory rent per unit willfall,as the fixed costs will be spread over a 12
12 demand.The balance of payments accounts consist of a current account with visibles and invisibles sections andtransactions in capital (external assets and liabilities including official financing). （三）思考与实践 Chapter questions and practices (1) The government of country C provides free medical treatment to all its citizens. However, for more affluent citizens, a small charge is made if they need medication. The government has recently decided to increase this charge by a moderate amount to reflect the increasing cost of the medicines. What effect is this likely to have on the demand for medicine within country C? ➢ This is unlikely to significantly affect the demand for medicine. This is because medicine is likely to be highly inelastic. Given that the medicines are likely to be seen as a necessity for most individuals, citizens are likely to continue paying for their medication regardless of the cost. The price of the medicines is currently low and only applies to the wealthier citizens. This means that these payments will only represent a small proportion of their income, again suggesting a low elasticity of demand. Also, given the relatively low prices charged by the government, it is unlikely that citizens will be able to find cheaper substitutes. This would indicate that they will continue to buy the medicines at the higher prices. The increase will presumably be long in duration. This would normally mean that consumers have more time to find alternatives, leading to ncreased elasticity and a fall in demand. However, given the other factors already mentioned, on balance there is likely to be little change in the level of demand (2) The government of country F has decided to impose a minimum wage for all workers, which is above the current average market labour rate. Which of the following is a potential consequence of this? A Rising employment within country F B Falling costs of manufacturing in country F C Lower selling prices, leading to higher demand D Surplus of labour created within country F ➢ D (3) Suppose we increase the number of workers while keeping the numberof machines constant. Initially the extra workers will allow specializationand increased efficiency. This will cause average costs to fall. ➢ As we keep adding staff, however, they will eventually start getting ineach other's way and having to wait to access machines. The systemtherefore becomes less efficient and the average production costs willbegin to rise. (4) As a business grows, the number of units it produces will increase. Thismeans that in the short term, the average cost of factory rent per unit willfall, as the fixed costs will be spread over a
larger number of units.Therefore as production increases,the total cost per unit falls. If the company continues to grow,it will eventually need to rent more andmore factory space.As factory space becomes searce,it will becomemore expensive to rent.This will push rent costs upwards and will forcethe cost per unit back up. (5)Identify which type of unemployment is being in the following statements AA worker loses their job because of the introduction of new technology BAfter the Wall Street Crash,millions of Americans were unable to find work C Jobs in the car industry have been reduced due toa strong union and high wages DA management has just been made redundant but is due tostart a new job in three weeks'time. EBar staff are ou of work in November ina Spanish holiday esor AA worker loses their job because of the introduction of newtechnology-structural. BAfter the Wall Street Crash,mericans were unable tofind work-cyclica C Jobs in the car industry have been reduced due to a strong unionand high wages-real wage. D A management accountant has just been made redundant but is dueto start a new job in three weeks time-frictional E Bar staff are out of work in November in a Spanish holiday resort -seasonal (四)教学方法与手段Teaching methods Lecturing.presentation in group,discussing and et al. (五)思政融入 组织学生深入学习2020年5月22日国务院总理李克强在第十三届全国人民代表大会第三次会议 上作的《政府工作报告》，讨论我国供给侧改革的成效，以及疫情期间我国财政政策所起的 重要作用。 第四章Chapter4-Micro economic factors (一)目的与要求Chapter learning objectivesand requirements 1.教学目标 1)Define the concept of demand and supply for goods and services. 2)Explainelasticity of demand and the impact of substitute and complementary goods. 3)Explain the economic behaviour of costs in the short and long term. 4)Define perfect.,competition and monopoly 2.育人目标 继上章微观经济学的学习，本章讲述宏观经济学的基本概念和原理，学生在了解宏 观经济政策手段后，能对我国正在进行的经济政策有一定了解，关心时政，树立远 大目标，心怀家国，为我国经济建设而努力学习。 (二)教学内容Chapter learning contents 第一节4.1 L.主要内容Main contents 13
13 larger number of units.Therefore as production increases, the total cost per unit falls. ➢ If the company continues to grow, it will eventually need to rent more andmore factory space. As factory space becomes scarce, it will becomemore expensive to rent. This will push rent costs upwards and will forcethe cost per unit back up. (5) Identify which type of unemployment is being described in the following statements. A A worker loses their job because of the introduction of new technology B After the Wall Street Crash, millions of Americans were unable to find work C Jobs in the car industry have been reduced due to a strong union and high wages D A management accountant has just been made redundant but is due to start a new job in three weeks’ time. E Bar staff are out of work in November in a Spanish holiday resort ➢ A A worker loses their job because of the introduction of newtechnology – structural. BAfter the Wall Street Crash, millions of Americans were unable tofind work – cyclical. C Jobs in the car industry have been reduced due to a strong unionand high wages – real wage. D A management accountant has just been made redundant but is dueto start a new job in three weeks time – frictional. E Bar staff are out of work in November in a Spanish holiday resort –seasonal （四）教学方法与手段 Teaching methods Lecturing, presentation in group, discussing and et al. （五）思政融入 组织学生深入学习 2020 年 5 月 22 日国务院总理李克强在第十三届全国人民代表大会第三次会议 上作的《政府工作报告》，讨论我国供给侧改革的成效，以及疫情期间我国财政政策所起的 重要作用。 第四章 Chapter 4--Micro economic factors （一）目的与要求 Chapter learning objectivesand requirements 1. 教学目标 1) Define the concept of demand and supply for goods and services. 2) Explain elasticity of demand and the impact of substitute and complementary goods. 3) Explain the economic behaviour of costs in the short and long term. 4) Define perfect, competition, oligopoly, monopolistic competition and monopoly. 2. 育人目标 继上章微观经济学的学习，本章讲述宏观经济学的基本概念和原理，学生在了解宏 观经济政策手段后，能对我国正在进行的经济政策有一定了解，关心时政，树立远 大目标，心怀家国，为我国经济建设而努力学习。 （二）教学内容 Chapter learning contents 第一节§4.1 1. 主要内容 Main contents
Demand and supply for goods and services The micro environment refers to the immediate operational environment including suppliers,competitors,customers,stakeholders and intermediaries. For the organisation as a system,we need to consider the various forces which have an In a free market,the price mechanism signals demand and supply conditions to producers andconsumers It therefore determines the activities of both producers and consumers, influencing the levelsof demand for and the supply of goods substitute and complementary goods economic behaviour of costs in the short and long term 2.基木概念和知识点Basic concepts demand and supply.perfect.competition,oligopoly,monopolistic competition and monopoly 3.问题与应用Questions and applications The position of the demand curve is determined by the demand conditions which include consumers'tastes and preferences,and consumers'incomes Elasticity,in general,refersto the relationship between two variables Priceelasticity demand explainsthe relationship between change in quantity demanded and changes in price. Income elasticity of demand measures the responsiveness of demand to changes in houschold incomeCross elasticity of demand is determined by the availability of substitute (competitors)products. The supply curve shows the quantity of a good which would be supplied by producers at a given price.The competitive market process results inan equilibrium price,which is the price at which marketsupply and market demand quantities are in balance.In any market. will change ifmarket demand or supply conditions change. The price mechanism brings demand and supply into equilibrium,and the equilibrium price for a goodis the price at which the volume demanded by consumers and the volume that firms would be willing tosupply is the same.This is also known as the market clearing price since at this price there will beneither surplusnor shortage in the market. Where maximum prices are imposed,there will be excess demand:rationing may be ,andblack marketeers may seek to operate.Where minimum prices are imposed producers will make excesssupply. (三)思考与实骏Chapter questions and practices (1)Kple is a motor car manufacturer.It may find that if it raises the price itsells its cars for,the demand for the vehicles,and therefore the numberof cars the company sells,will fall.This could be due to the substitution effect.There are a large numberof car manufacturers that customers can choose between.If K raises itsprices it may become more expensive than it rivals,leading customersto switch to lower-priced alternatives.K's sales may also suffer 14
14 Demand and supply for goods and services The micro environment refers to the immediate operational environment including suppliers,competitors, customers, stakeholders and intermediaries. For the organisation as a system, we need to consider the various forces which have an impactinternally and externally. In a free market, the price mechanism signals demand and supply conditions to producers andconsumers. It therefore determines the activities of both producers and consumers, influencing the levelsof demand for and the supply of goods. substitute and complementary goods economic behaviour of costs in the short and long term 2.基本概念和知识点 Basic concepts demand and supply, perfect, competition, oligopoly, monopolistic competition and monopoly 3. 问题与应用 Questions and applications The position of the demand curve is determined by the demand conditions, which include consumers'tastes and preferences, and consumers' incomes. Elasticity, in general, refers to the relationship between two variables. Price elasticity of demand explainsthe relationship between change in quantity demanded and changes in price. Income elasticity of demand measures the responsiveness of demand to changes in household incomeCross elasticity of demand is determined by the availability of substitute (competitors') products. The supply curve shows the quantity of a good which would be supplied by producers at a given price.The competitive market process results in an equilibrium price, which is the price at which marketsupply and market demand quantities are in balance. In any market, the equilibrium price will change ifmarket demand or supply conditions change. The price mechanism brings demand and supply into equilibrium, and the equilibrium price for a goodis the price at which the volume demanded by consumers and the volume that firms would be willing tosupply is the same. This is also known as the market clearing price, since at this price there will beneither surplus nor shortage in the market. Where maximum prices are imposed, there will be excess demand: rationing may be necessary, andblack marketeers may seek to operate. Where minimum prices are imposed, producers will make excesssupply. （三）思考与实践 Chapter questions and practices (1) K plc is a motor car manufacturer. It may find that if it raises the price itsells its cars for, the demand for the vehicles, and therefore the numberof cars the company sells, will fall.This could be due to the substitution effect. There are a large numberof car manufacturers that customers can choose between. If K raises itsprices, it may become more expensive than its rivals, leading customersto switch to lowerpriced alternatives.K’s sales may also suffer
because of the income effect.Cars arenormally relatively expensive,costing ahigh proportion of a consumer'sincome.IfK prices its cars at too high a price,many of its customersmay simply become unable toafford the product,leading toa drop indemand (2)Suppose we are currently selling a product at a price of $20 with aresulting demand of units per annum.Amarketing manager hassuggested dropping the price toand claims that demand will riseto550,000 units Calculate the PED. >Solution Percentage change in price=-5% Percentage change in demand=+10% ·PED=(10)/(5)=2 (3)Would a computer games manufacturer expect tose a high or low PEDfor its products Overall,the games consoles are likely to be at least somewhat elasticdue to the high price and lack of necessity.This effect may be reduced ifthe manufacturer hasa powerful brand name,or produces an innovativecomputer game-at least in the short term. .Availability of substitutes-there are a number of other computergames manufacturers in the market.This would tend to increasePED as it means that if the games manufacturer raises their prices,their customers can easily switch toalower priced competitor However,if the company has a strong reputation in the market.orproduces an innovative game.it will reduce the PEDas customersmay be willing to pay higher prices to buy what they perceive as asuperior produet. .Proportion of income spent on items-the higher the proportion oftheir income that a customer spends ona gamescons thehigher the PED.If buying a computer game uses a large proportionof a customer's income,price rises will increase the chance thatthey will be unable toafford the product,reducing demand.Customers will also be more likely to scrutinisehighpricepurchases to see if they represent value for money. .Necessity-necessities,such as bread or petrol,are normallyinelastic,as customers will be forced to purchase them regardlessof whether the price increases or not.Games are not necessitiesso this will tend to make them more elastic.If the price becomes toohigh. customers can simply choose not to purchase them. .Time-the longer a price change lasts,the more likely the productis to become elastic.A rise in prices for a games console may notreduce demand in the short term.However,the longer the priceremains high,the more time customers have to shop around forcheape substitutes. (四)教学方法与手段Teaching methods Lecturing,presentation in group,discussing and et al. (五)思政融入 课堂讨论或小论文方式，组织学生思考：党的十九届六中全会10个明确中的经济内容。必 须坚持和完善社会主义基本经济制度，使市场在资源配置中起决定性作用，更好发挥政府 作用，本文新发展阶段，贯彻创新、协调、绿色、开放、共享的新发展理念，加快构建以 15
15 because of the income effect. Cars arenormally relatively expensive, costing a high proportion of a consumer’sincome. If K prices its cars at too high a price, many of its customersmay simply become unable to afford the product, leading to a drop indemand. (2) Suppose we are currently selling a product at a price of $20 with aresulting demand of 500,000 units per annum. A marketing manager hassuggested dropping the price to $19 and claims that demand will rise to550,000 units.Calculate the PED. ➢ Solution • Percentage change in price = –5% • Percentage change in demand = +10% • PED = (10) / (5) = 2 (3) Would a computer games manufacturer expect to see a high or low PEDfor its products? ➢ Overall, the games consoles are likely to be at least somewhat elasticdue to the high price and lack of necessity. This effect may be reduced ifthe manufacturer has a powerful brand name, or produces an innovativecomputer game – at least in the short term. • Availability of substitutes – there are a number of other computergames manufacturers in the market. This would tend to increasePED as it means that if the games manufacturer raises their prices,their customers can easily switch to a lower priced competitor.However, if the company has a strong reputation in the market, orproduces an innovative game, it will reduce the PED as customersmay be willing to pay higher prices to buy what they perceive as asuperior product. • Proportion of income spent on items – the higher the proportion of their income that a customer spends on a games console, thehigher the PED. If buying a computer game uses a large proportionof a customer’s income, price rises will increase the chance thatthey will be unable to afford the product, reducing demand.Customers will also be more likely to scrutinisehighpricepurchases to see if they represent value for money. • Necessity – necessities, such as bread or petrol, are normallyinelastic, as customers will be forced to purchase them regardlessof whether the price increases or not. Games are not necessities,so this will tend to make them more elastic. If the price becomes toohigh, customers can simply choose not to purchase them. • Time – the longer a price change lasts, the more likely the productis to become elastic. A rise in prices for a games console may notreduce demand in the short term. However, the longer the priceremains high, the more time customers have to shop around forcheaper substitutes. （四）教学方法与手段 Teaching methods Lecturing，presentation in group，discussing and et al. （五）思政融入 课堂讨论或小论文方式，组织学生思考：党的十九届六中全会 10 个明确中的经济内容。必 须坚持和完善社会主义基本经济制度，使市场在资源配置中起决定性作用，更好发挥政府 作用，本文新发展阶段，贯彻创新、协调、绿色、开放、共享的新发展理念，加快构建以