Economics: Evolving Systems BAM

Transcription

1 Economics: Evolving Systems BAM Peter Forint BA, MBA, GBM

2 Proposed Agenda l Quick Recap Introductions Basic Rules l Emergencies l Blackboard Course Tour l Chapter 1 l Summary l Quiz Next Class 2

3 Emergencies (416) x 88 Seneca Security 3

4 Typical Class Format l In the news l Quiz l Review of last lecture plus questions l Learning outcomes for new lecture l Key concepts l Application-video, group exercise, case, or questions from text, etc. l Summary & review l Comment re next class or assignment 4

5 BAM101 Topic Outline Addendum Wk Week Of Topic Chpt Evaluation 1 January 12 Introduction to BAM101 LinkedIn 2 January 19 Economics: Evolving Systems 1 3 January 26 Understanding Money and the Canadian 2 Financial System 4 February 2 Politics: Governments Roles 3 5 February 9 Social: Society, Corporate 4 Responsibility, and Making Ethical Decisions 5 Technology: Managing Information for Business Success 6 February 16 International: The Global Marketplace 6 7 February 23 MID TERM EXAM Mid Term Exam in class; chapters 1-6 Value: 25% 8 March 2 STUDY WEEK-NO CLASSES (College open) 9 March 9 Entrepreneurship and Small Business 7 Business News Research and Citation Tutorial (5%) and 10 March 16 Forms of Business Ownership 8 11 March 23 Management and Leadership 9 12 March 30 Analyzing the Business April 6 Finance: Maximizing the Value April 13 Comprehensive Review 15 April 20 FINAL EXAM WEEK (Date and location TBA) Major Research Assignment due online Sunday, March 15, Value: 20% Comprehensive Final Exam; Value: 30% 5

6 BAM101 Topic Outline Addendum l More deliverables TBD (To Be Determined) l Quiz l LinkedIn Assignment l Etc. 6

7 About Slides l Standard Slides from Publisher l Slides from Peter Forint l Slides from other professors Steam Whistle Brewing Co. Canadian OB 8e McShane/Steen 4 Several organizational behaviour practices have Frank Stronach contributed to Steam Whistle Brewing Co. s success, such las From one man shop to leadership, human billionaire capital, diversity, and organizational l Fair Enterprise philosophy effectiveness. introduced in 1971: Workers become owners Managers become partners Austrian-Canadian 2012 The McGraw-Hill Companies, Inc. All rights reserved Sources: 13 Why do so many people especially more successful people find smartphone use in meetings to be inappropriate? It s because when you access your phone it shows: Lack of respect. You consider the information on your phone to be more important than the conversation in the meeting; you view people outside of the meeting to be more important than those sitting right in front of you. Lack of attention. You are unable to stay focused on one item at a time; the ability to multitask is a myth. Lack of listening. You aren t demonstrating the attention and thinking that is required of truly active listening. Lack of power. You are like a modern day Pavlovian dog who responds to the beck and call of others through the buzz of your phone. 7

8 About Slides: Peter s Mod s Canadian OB 8e McShane/Steen Organizational Behaviour and Organizations 11 Organizational behaviour The study of what people think, feel, and do in and around organizations Organizations Groups of people who work interdependently toward some purpose Collective entities Collective sense of purpose 2012 The McGraw-Hill Companies, Inc. All rights reserved LO1: Organizational Behaviour and Organizations Organizational behaviour The study of what people think, feel, and do in and around organizations Organizations Groups of people who work interdependently toward some purpose Collective entities Collective sense of purpose Steam Whistle is one of Peter s favourites! Canadian OB 8e McShane/Steen The McGraw-Hill Companies, Inc. All rights reserved 8

9 Just because I DO talk about it in class Does not mean it will be on the Exam(s)! 9

10 Just because I DON T talk about it in class Does not mean it will not be on the Exam(s)! 10

11 NETA PowerPoint Presentations to accompany The Future of Business Fourth Edition Adapted by Norm Althouse, University of Calgary Copyright 2014 by Nelson Education Ltd.

12 Economics: Evolving Systems Chapter 1

13 Making the Connection Copyright 2014 by Nelson Education Ltd.

14 Learning Outcomes 1. Explain what economics is and how the three sectors of the economy are linked. 2. Understand the primary features of the world s economic systems. 3. Explain the four types of market structure. 4. Discuss the basic microeconomic concepts of demand and supply, and how they establish prices. 5. Show how economic growth, full employment, and price stability indicate a nation s economic health. 6. Describe how the Bank of Canada uses monetary policy, and how governments use fiscal policy to achieve their macroeconomic goals. 7. List some of the trends that are reshaping micro- and macroeconomic environments. 14

15 Basic Terms } Economics The study of how a society uses scarce resources to produce and distribute goods and services. } Microeconomics The sub-area of economics that focuses on individual parts of the economy, such as households or firms. } Macroeconomics The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products. 15

16 Business and Economies Working Together who decides the answers determines the type of economy 16

17 Factors of Production Natural Resources Resources Used to Create Products Labour Capital Knowledge Entrepreneurship 17

18 Factors of Production Source: McGraw-Hill Ryerson 18

19 Factors of Production Which do you think is most important? Why? 19

20 Exhibit: Economics as a Circular Flow 20

21 Economic Systems An economic system is the combination of policies, laws, and choices made by a nation s governments to establish the systems that determine what goods and services are produced and how they are allocated. JOE FOX/AGE FOTOSTOCK 21

22 Economic Systems 22

23 Economic Systems l Capitalism: individuals seeking profits produce goods and services. Goods and services are sold in a free market to those who can pay for them. l Communism: the government decides what will be produced and who will consume the results of that production. l Socialism: some free market and some government allocation. l Most countries have a mixed economy. Source: McGraw-Hill Ryerson 23

24 Three Economic Systems Socialism Mixed (Highly Controlled) Communism Source: McGraw-Hill Ryerson (Little Control) Capitalism 24

25 Capitalism l An economic system in which all or most of the factors of production and distribution (e.g., land, factories, railroads, stores) are privately owned (not owned by the government) and are operated for profit. l Capitalism is the popular term used to describe free-market economies. Source: McGraw-Hill Ryerson 25

26 Capitalism: Free-market The free market is one in which decisions about what to produce and in what quantities are made by the market. that is, by buyers and sellers negotiating prices for goods and services. No country is purely capitalist; no market is truly free. Source: McGraw-Hill Ryerson 26

27 Socialism l Socialism is an economic system based on the premise that some, if not most, basic businesses, such as steel mills, coal mines, and utilities, should be owned by the government so that the profits can be evenly distributed among the people. Source: McGraw-Hill Ryerson 27

28 Communism l Communism is an economic and political system in which the state (the government) makes almost all economic decisions and owns almost all of the major factors of production. l Communism affects personal choices more than socialism does. l Some communist countries have not allowed their citizens to practice certain religions, change jobs, or move to the town of their choice. Source: McGraw-Hill Ryerson 28

29 Market Structures l Back to Capitalism Source: McGraw-Hill Ryerson 29

30 LO3: Competing in a Free Market 30

31 LO3: Market Structures How many sellers? Monopoly Oligopoly Monopolistic Competition Perfect Competition One Seller Source: McGraw-Hill Ryerson Many Sellers 31

32 Oligopoly l An oligopoly occurs when a few sellers dominate a market. l Oligopolies exist in industries that produce products in the areas of oil and gas, tobacco, automobiles, aluminum, and aircraft. Source: McGraw-Hill Ryerson 32

33 Oligopoly l Oligopoly: One reason some industries remain in the hands of a few sellers is that the initial investment required to enter the business is tremendous like the airline industry. Source: McGraw-Hill Ryerson 33

34 Monopoly l A monopoly occurs when there is only one seller for a good or service, and that one seller controls the total supply of a product and the price. l Traditionally, monopolies were common in areas such as water, electricity, and telephone services that were considered essential services. Source: McGraw-Hill Ryerson 34

35 L04: Equilibrium Equilibrium The quantity of a product demanded equals the quantity supplied. Exhibit : Equilibrium Price and Quantity The number of snowboarder jackets produced and bought at $80 will tend to rest at equilibrium unless there is a shift in either demand or supply. 35

36 Supply & Demand Supply refers to the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time. Generally speaking, the amount supplied will increase as the price increases because sellers can make more money with a higher price. Source: McGraw-Hill Ryerson 36

37 Supply & Demand l l Demand refers to the quantity of products that people are willing to buy at different prices at a specific time. Generally speaking, the quantity demanded will increase as the price decreases. Source: McGraw-Hill Ryerson 37

38 Equilibrium Point The place where quantity demanded and supplied meet is called the equilibrium point. Source: McGraw-Hill Ryerson 38

39 Equilibrium Point & Market Price In the long run, that price would become the market price Market price, then, is determined by supply and demand Source: McGraw-Hill Ryerson 39

40 Changes in Demand and Supply 40

41 LO6 Macroeconomics: The Big Picture l Economic Growth: An increase in a nation s output of goods and services l Gross Domestic Product (GDP): The total market value of all final goods and services produced within a nation s borders in a year l Gross National Product (GNP): The total market value of all final goods and services produced within a nation s borders in a year, regardless of location 41

42 LO6 Macroeconomics: The Big Picture l Business Cycles: Upward and downward changes in the level of economic activity l Recession: A decline in GDP that lasts for at least two consecutive quarters l Boom: Increase in economic activity 42

43 Unemployment Rate l Frictional: Short term, always there, unrelated to business cycle l Structural: Mismatches not part of business cycle l Cyclical: When whole economy is down l Seasonal: Industry specific seasons 43

44 Inflation 44

45 There are three kinds of lies: lies, damned lies, and statistics. Mark Twain 45 45

46 Williams Annual Consumer Inflation 46

47 LO6: Macroeconomic Main Goals Striving for Economic Growth Full Employment Price Stability 47

48 Monetary vs Fiscal Policy l Bank of Canada l Monetary Policy Contractionary vs. Expansionary l Fiscal Policy 48

49 Joe Oliver postpones federal budget as oil price plummets l Canadians must wait until at least April to see if Ottawa can afford billions of dollars in promised tax breaks and new spending on families. Toronto Star

50 LO7: The Future of Economics } Lack of confidence in the markets. } Meeting competitive challenges. } Increasing entrepreneurship worldwide. 50

51 Learning Outcomes 1. Explain what economics is and how the three sectors of the economy are linked. 2. Understand the primary features of the world s economic systems. 3. Explain the four types of market structure. 4. Discuss the basic microeconomic concepts of demand and supply, and how they establish prices. 5. Show how economic growth, full employment, and price stability indicate a nation s economic health. 6. Describe how the Bank of Canada uses monetary policy, and how governments use fiscal policy to achieve their macroeconomic goals. 7. List some of the trends that are reshaping micro- and macroeconomic environments. 51

52 Next Class l Quiz 10 multiple choice questions in 10 minutes l Money and the Canadian Monetary System 52