agricultural economics class with dr.niv nozari welcome to
TRANSCRIPT
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Agricultural Economics Class
With
Dr.Niv Nozari
WELCOME TO
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Microeconomics: ( the Microeconomics: ( the “trees”)“trees”)
Studies economic behavior of individual decision making units such as,
• Consumers
• Resource Owners
• Business Firms (producers)
in a market economy
At times, micro will study economic behavior at the industry level
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Macroeconomics: (the Macroeconomics: (the “forest”)“forest”)
Studies the aggregate level of economic activity,
• Economic system’s value of total
output: GDP• Level of National
Income• Total Level of
Unemployment• General Price Level of
the Economy: Inflation
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Real GDP Growth (Percent)
-1
0
1
2
3
4
5
6
90 91 92 93 94 95 96 97 98 99 20001st
QTR
20002ndQTR
Year
Per
cen
t R
eal
GD
P G
row
th
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National Unemployment Rate
0
1
2
3
4
5
6
7
8
9Ja
n-90
Jul-9
0
Jan-
91
Jul-9
1
Jan-
92
Jul-9
2
Jan-
93
Jul-9
3
Jan-
94
Jul-9
4
Jan-
95
Jul-9
5
Jan-
96
Jul-9
6
Jan-
97
Jul-9
7
Jan-
98
Jul-9
8
Jan-
99
Jul-9
9
Jan-
00
Jul-0
0
Month/Year
Un
emp
loym
ent
Rat
e (%
)
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Industrial Capacity Utilization Rate
74
75
76
77
78
79
80
81
82
83
84
85
Jan-
90
May
-90
Sep-
90Ja
n-91
May
-91
Sep-
91Ja
n-92
May
-92
Sep-
92
Jan-
93M
ay-9
3Se
p-93
Jan-
94
May
-94
Sep-
94Ja
n-95
May
-95
Sep-
95
Jan-
96M
ay-9
6Se
p-96
Jan-
97M
ay-9
7Se
p-97
Jan-
98M
ay-9
8
Sep-
98Ja
n-99
May
-99
Sep-
99
Jan-
00M
ay-0
0
Month/Year
Cap
acity
Util
izat
ion
Rat
e
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Work-Force Productivity: Output per Hour Worked
0
1
2
3
4
5
6
90 91 92 93 94 95 96 97 98 99 20001st
QTR
20002ndQTR
Year
Per
cen
t In
crea
se
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Macroeconomics: (the Macroeconomics: (the “forest”)“forest”)
we will deal with some macroeconomic topics first, then concentrate on microeconomics
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Normative Economics:Normative Economics:
Normative: subjective, value laden, emotional
“What ought to be” economics
Rx and/or Policy oriented
Hear a bunch of normative economic statements during political elections
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Positive Economics:Positive Economics:
Positive: Objective, without emotion or value judgment!
“What is, What was, What will be” economics
Based on probability and statistical methods
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Microeconomics
Normative microeconomics
Positive microeconomics
Macroeconomics
Normative macroeconomics
Positive macroeconomics
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MacroeconomicsMacroeconomics
1. Fiscal Policy:
Govt. tax and spend policies
2. Monetary Policy
Manipulation of the money supply by the Federal Reserve system to affect short-term interest rates and control inflation
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Private Property RightsPrivate Property Rights
“Negative Externality”:
When you produce or consume a commodity or service within your private property rights that imposes a cost on a third party not directly involved in the market transaction.
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Private Property RightsPrivate Property Rights
The cost imposed on the third party is very difficult (expensive) for the third party to recover
AKA a “Spillover Cost”
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Private Property RightsPrivate Property Rights
Laws are often enacted by legislative bodies that constrain private property rights in order to rectify negative externalities, or at least reduce the cost to third parties in recovering damages
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Negative ExternalitiesNegative Externalities
Some Examples:
-Seat Belt Crack Down in Tehran.-Iran Law for Motorcyclists.
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Negative ExternalitiesNegative Externalities
Possible Solutions:
– Pass Laws
– Post Bond to assure financial responsibility
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Positive ExternalitiesPositive Externalities
When you produce or consume a commodity or service within your private property rights that bestows a benefit on a third party not directly involved in the market transaction.
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Positive ExternalitiesPositive Externalities
The benefit bestowed on the third party is very difficult (expensive) for the third party to recover
AKA a “Spillover benefit”
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References:References:
•N.c.State university-College of Agriculture and Life science –Dr. herman_sampson