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What is Economics?

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Hee jin Hyun

on 22 July 2013

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Transcript of What is Economics?

Case study of
Apple products

What is Economics?
Supply and Demand
Apple products are becoming scarce. Apple’s aggressive annual schedule for each of their products could be killing Apple in not being able to match the supply vs demand on their products. There seems to be a lot of production problems in China
iPhone is luxury good with unique features and only few direct substitutes
consumes large portion of the consumer budget
Inelastic because people will still buy it even if the price rises a bit. It won't affect the demand.
The total revenue will also increase
Elasticity of Demand
If Apple company can't meet the demand on their products, should they really continue their aggressive schedule and put more demand on their production lines that it can't already cope with?
Choice is the result of scarcity because there is insufficient productive resources to satisfy an human beings' wants.
What really Matters Today?
Irrational behavior...
one of the most expensive mobiles
International trade
Why Are Apple Products
Made in China?
speedy manufacturing
opportunity cost of making apple products in US
China gets all sorts of input from other countries from Japan, the US, Malaysia, etc. and it is ONLY assembled in China factories.

In US,
continue to make its product design
keep most of its software development
product management, etc.
'Made in China' Apple products
benefit US economy
Marginal value
People have higher marginal value because they are still wiling to pay at high prices.
US. is reaching socioeconomic goals-productive efficiency
Us gets Apple products and services in the least costly way from China. They are saving the cost.
We trade things that have more marginal benefit. Each country have comparative advantage and specializes in something. Consequently, the price of the final product can be cheaper.
Marginal Utility
scarce and the marginal utility is relatively high.
Subsitutes most of the things that we need in life.
In Japan, the government is charging Apple Company taxes so much for selling Apple products in Japan.
There are 47,000 people employed by Apple in U.S. iOS (Apple's mobile operating system) developers has 210,000 jobs in U.S.. There are also 257,000 employees in support roles at different companies such as making iphone glass.
Replaced 490,000 American Jobs
Circuit City Layoffs: 42,974
Kodak Layoffs: 28,000
U.S. Postal Service Layoffs: 10,615
It is not "companies" or "entrepreneurs" who create jobs--it is healthy economic ecosystems that create jobs.
Invisible hand
It is not controlled by anything, but the preferences of the suppliers and consumers exerting some direction where supply and demand should go
same price as the iPhone 4S when it was released
iPhone 5 is expected to give an extremely good multi media experience with slightly larger screen at a higher resolution.
Full transcript