ECONOMIC CONCEPTS Basic economic concepts Terms of Need
ECONOMIC CONCEPTS
Basic economic concepts Terms of Need Human beings are constantly striving to maintain high standards of biological and social life. This effort is possible only by the presence of a number of elements other than himself. The absence of these elements can cause people with various degrees of discomfort such as hunger, thirst or chills; it may even cause death. Their presence leads to a sense of joy and pleasure, such as saturation, warming, listening to music, and fashionable dressing. These elements that cause sadness and pain to people in their absence and create feelings of satisfaction and joy in their existence is called as “need”. People have many and varied needs that they want to address. Moreover, some of them, such as eating, thirsting, even if some of them will reappear after a while.
Compulsory needs such as nutrition, shelter, warming and rest are necessary for the continuation of human life. Education, entertainment and so on. . needs are called Social and Cultural Needs. With regard to needs, the following determinations can be made: Needs are endless. Needs differ in terms of violence. The severity of needs decreases as they are satisfied. Initially non-compulsory needs may become compulsory over time. The needs and the means for satisfying the needs can be substituted with each other.
Goods and Services Goods and services are economic means to meet human needs, which can be exchanged for money or other goods and services. When economic goods are mentioned, services should be understood as well as goods. There also goods and services that do not fall within the scope of economics. Air, sea water can be given as an example to the non-economic goods. Examples of such services can be mentioned as; public services such as defense, public order, title deeds and population services, and services of organizations such as the Red Crescent and solidarity collections, and housewives' home services.
Consumption and Production The use of economic goods and services to meet the needs of people is called consumption. The vast majority of economic goods and services cannot be used to meet human needs in their current form in nature. Economic goods and services are generally obtained through the application of human labor and capital to natural resources. This application is called production. Production activity adds shape, location, time and property benefits to natural resources. By changing the chemical and physical structure of natural resources, shape benefit is created. For example; transportation of carcass, meat or processed meat product, from the meat industry business to wholesalers, shopping centers, markets and butchers is mentioned as benefit of place. Having these products available to the consumer in places that they can buy at a time they need is mentioned as the time benefit The property benefit is also created by ensuring that the consumer who pays the price has these products.
Barter Produced goods and services often come only to meet the manufacturer's own needs. Therefore, this surplus production should be put on the market to be used to meet the needs of other people in the society. Exchange of a good or service with another good or service or money is called an Barter. Distribution In an economy, the income created in a certain period is shared by the elements involved in production called income distribution. In contemporary societies, everyone involved in production gets its share in money. But here, money is just a tool. In fact, the real income divided is goods and services.
Production Factors The factors necessary for the realization of the production activity are called production factors. Production factors are; Labor, capital, nature and entrepreneurs. The time and effort that people allocate to the production of goods and services is called labor Payments for labor are called wages. Machinery, equipment, animals, buildings and tools used in the production of goods and services are called capital. The concept of capital, which is common among the people, is different. The income of capital is called interest. Natural resources used in the production of goods and services are defined as nature. Rent is obtained in return for the use of nature in production. The person who thinks, plans, efficiently conducts, organizes production and takes the necessary risks is called an entrepreneur. The entrepreneur can be a real or legal person. Entrepreneur's income is called profit.
Income and Savings Revenue is the gain of a production factor by participating in the production process People use their income to provide goods and services they need, that is, consumption. The unconsumed part of a person's income is called savings. Basic Economic Assumptions Closed Economy Assumption In this assumption, it is assumed that one country has no economic relations with other countries. Thus, when evaluating the national economy, no impacts such as foreign trade, foreign capital, foreign aid are found.
Assumption of No State Intervention It is accepted that the state did not intervene in any way in economic life. Thus, in a national economy, the results of the automatic functioning of the market mechanism are examined. Assumption of Rational Behavior It is assumed that decision-making units always act rationally in the relations between the components of economic activity. According to this assumption, while the consumer always tries to provide maximum benefit for himself, the producers try to make maximum profit. Assumption that Other Conditions Have Not Changed (Ceteris Paribus) During the examination of some economic events, it is assumed that some other events and conditions have not changed and remain the same. This makes it possible to simplify the issues discussed.
Perfect Full Competition Market Assumption According to this assumption, it is accepted that perfect competition conditions are realized perfectly both in the economic goods and services market and in the production factors market. However, in particular, monopoly, oligopsone etc. this assumption is not accepted in the examination of the issues related to incomplete competition markets. Assuming the Constant Return of the Scale In the examination of production-related issues, it is assumed that enlarging or reducing the production scale will not affect production performance. Accordingly, the higher the production scale, the higher the amount of production. Assumption of No Money Utilization When researching microeconomics issues, it is sometimes assumed that money is not used to avoid problems arising from the use of money in economic life.
EMPLOYMENT AND ITS PLACE IN ECONOMIC LIFE
Employment, Definition, Scope and Place in the Economy Whether an economy is developing adequately is measured first of all by whether it can provide jobs to anyone who wants to work at the current wage level. Not being able to provide jobs to anyone who wants to work is a major shortcoming for a national economy. Employment of persons who are willing and capable of working and are in the economically active population group between the ages of 15 -64 is called employment at the current wage level. At the current wage level, it is the full employment level that everyone can find work for. In real life, such a situation is like form of finding a workplace more (or just as much) than the job seekers. The level of employment, or the volume of work that has the same meaning, is the sum of simple business hours in a country in a given period. There is a direct and close relationship between employment level and national income. In other words, as employment level increases, so does real national income. However, changes in the employment level do not have the same effect on real national income. The reason for this is the law of diminishing returns.
Real National Income Employment REAL NATIONAL INCOME - EMPLOYMENT RELATION
Full employment should not be considered as a fixed level. The continuous increase of the population gives employment a dynamic feature. Maintaining full employment is possible by continuously expanding the employment volume. What about “Unemployed? ? People living on rental income, workers who do not work on annual leave, sick and incompetent labor force, women who do housework voluntarily do not fall under the concept of unemployed. Voluntary or voluntary unemployment is the absence of a job because a higher wage is requested than the current one or better job opportunities are sought than the current working conditions. It is not a real unemployment situation.
In general, the term unemployment refers to non-voluntary unemployment. Types of unemployment are; cyclical unemployment, seasonal unemployment technological unemployment hidden unemployment A significant part of the active population in Turkey is estimated that 15 -20 percent is hidden unemployment. Technical marginal productivity of those identified as hidden unemployed is zero. Such unemployed people are mostly concentrated in the agricultural sector in rural areas.
According to the data of Turkey Statistical Institute (TSI) "Household Labor Force Statistics, 2018 June" the number of unemployed in Turkey increased by 64 thousand persons compared to June of the previous year 2018 and has reached 3 million 315 thousand people. The unemployment rate stood at 10. 2%. In the same period; The nonagricultural unemployment rate was estimated as 12. 1% with a 0. 1 percentage point decrease. While the youth unemployment rate, which includes the 15 -24 age group, decreased by 1. 2 points to 19. 4%, it was 10. 4% in the 15 -64 age group unchanged compared to the same period. The number of those employed last year increased by 611 thousand people compared to the previous year and reached to 29 million 314 thousand people. While the number of employees in the agricultural sector decreased by 133 thousand people compared to last year, the number of employees in non-agricultural sectors increased by 1 million 44 thousand people.
As of 2018, 19. 2% of those employed were in agriculture, 19. 6% in industry, 7. 2% in construction and 54% in services. Compared to the same period of the previous year, the share of services sector in employment increased by 1. 5 points, the share of construction sector increased by 0. 3 points, while the share of agriculture sector decreased by 1. 3 points and the share of industrial sector decreased by 0. 5 points. In the same period, the overall labor force participation rate of Turkey was 53. 8% increased by 0. 9 points compared to the previous year. In 2017, the labor force participation rate for men increased by 0. 5 points compared to the previous year and reached 72. 5%; for women, it increased by 1. 1 points to 33. 6%. The number of people not included in the labor force increased from 27 million 901 thousand in 2017 to 27 million 997 thousand in 2018.
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