Scribd
Upload
6 views

Lecture 1

Uploaded by

mayar medhat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
6 views

Lecture 1

Uploaded by

mayar medhat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 17

Lecture 1: Public Finance

INTRODUCTION TO ECONOMIC
CONCEPTS

Dr. Yara El-Sehaimy


[email protected]
Who Am I?
2

 Dr. Yara El-Sehaimy

 Graduated from GUC with triple majors in Economics,


Finance, and Strategic Management.

 I earned my master in 2019, and PhD in 2023 both in


Economics.

 My area of interest is Macroeconomics, Developmental


Economics, Low-Income Countries (LICs), Econometrics.
Teaching Believes
3

 Education is a bidirectional process; we both learn from


each others.

 Don’t postpone studying; this concept is just not working


with my courses!

 Whenever you don’t understand anything just ask! It is


really that simple.

 Check the course outline for any announcements or even


amendments in the course deadlines.
Course Work
4

 20% Midterm 1, 20 MCQs.

 20% Midterm 2, 4 essay questions.

 40% Final, 40 MCQs.

 20% Course Work


 10% Quizzes.
 10% Participation.
Course Material
5

 Lecture Slides

 Lecture Notes

 Tutorial Sheets

 Textbook: Public Finance A Contemporary Application of


Theory to Policy by David Hyman
 Soft Copy Link:
Chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.uv.mx/personal/clelanda/files/2014/09/Hyman-David-
2011-Public-Finance.pdf
Lecture 1: Public Finance

INTRODUCTION TO ECONOMIC
CONCEPTS
Outline
7

 Introduction - When it all started?-

 What is economics?

 How people make decision?

 How people interact?

 How the economy as whole works?

 Conclusion
When It All Started?
8
 In 1776, 18th century.

 Adam Smith in his book “Wealth


of Nations” observed a pattern in
goods consumption.

 He concluded that, we have


limited/scarce resources with
unlimited needs and want.

 So he started to ask, how can we


efficiently allocate recourses.

 This is how economics came to


life!
Economics
9

 The study of how society manage to efficiently allocate its


scarce recourses.

 It is a social science that studies the decision-making


process of allocating resources efficiently by households,
firms, and governments.

 Economics has 10 main principles to study the following:


 How people make decisions?
 How people interact?
 How the economy as whole works ?
How People Make Decision?
10

 Principle #1: People Face Tradeoffs


 Main tradeoff of the societies: helping unemployed people from the
taxes of the employed one.

 Principle #2: The Cost of Something is What You


Give Up To Get It.
 Opportunity cost: the cost of the forgone benefit/second best choice.

 Principle #3: Rational People Think at the Margin


 Marginal benefit > Marginal cost.

 Principle #4: People Respond to Incentives


How People Interact?
11

 Principle #5: Trade Can Make Everyone Better


Off
 Specialization as a form of efficient allocation of recourses.

 Principle #6: Markets Are Usually a Good Way to


Organize Economic Activity
Markets
12

Price Supply = Producers

P* Equilibrium

Demand = Consumers

Q* Quantity

Through pricing mechanism, markets are able to efficiently


allocate the scare resources
How People Interact?
13

 Principle #5: Trade Can Make Everyone Better


Off
 Specialization as a form of efficient allocation of recourses.

 Principle #6: Markets Are Usually a Good Way to


Organize Economic Activity
 Pricing mechanism.

 Principle #7: Governments Can Sometimes


Improve Market Outcomes
 Market failure
How The Economy As Whole Works?
14

 Principle #8: A Country’s Standard of living


Depends on Its Ability to Produce Goods and
Services.
 GDP = C + I + G + NX
 Budget Surplus, equilibrium, deficit.
 GDP↑, economy expand, employment opportunities ↑, living
standers higher.
 Stabilization Policies: Fiscal Vs Monetary.

 Principle #9: Prices Rise When the Government


Prints Too Much Money
 When money↑ without ↑in production, ⸫ inflation.
How The Economy As Whole Works?
15

 Principle #10: Society Faces a Short-Run


Tradeoff between Inflation and Unemployment
15 Minutes
16

How to Send a Professional E-mail?


Thank You!
17

!ONE LECTURE DOWN ELEVEN TO


GO!

You might also like