Welcome!
Economics and Business
Dr. Satyendra Singh
Professor, Marketing and International Business
University of Winnipeg, CANADA
https://sites.google.com/view/drsatsingh
s.singh@uwinnipeg.ca
Objectives
① Economics
② Economic system
③ Economic indicators
④ Business cycle
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① Economics
Microeconomics
Behaviour of people/organisation in particular markets
Individual level - income, price, demand, supply, goods, labor…
Macroeconomics
Nation’s economy as a whole
National level - national income, interest rate, inflation, unemployment…
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Unemployment Rate in Canada 1989—2019
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Source: Data from Statistics Canada, “Labour Force Characteristics by Sex and Detailed Age Group, Annual,” Table 14-10-0327-01. doi: 10.25318/1410032701-eng
Types of Unemployment
Frictional – quit job, boss, working condition…
Structural – offshore, competition, no manufacturing, robots…
Cyclical – slow economy…
Seasonal – festival, harvesting…
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② Economic Systems
Capitalism – Adam Smith 1776 – work hard to get reward
Entrepreneurial, free to negotiate price, quantity…
Factors of production and distribution—such as land, factories, railroads, and stores—are owned by individuals (not owned by the government).
Market economy
Communism – Government decides production and consumption
Socialism – Some free market and some government allocation
Mixed economy – Government involvement in the economy. Regulated
e.g. education, health… Canada!
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Supply and Demand curve – determines market price
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Competition Within Free Markets
Monopoly – 1 seller, water, electricity…
Oligopoly – few, oil, auto, aircraft…
Monopolistic – many, similar, substitution, salon, restaurant not perfect…
Perfect – many, small player, no seller dominates…commodity, identical, tomato…
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③ Economic Indicators
Gross Domestic Product (GDP) – total goods/services produced
Unemployment rate, Housing prices, Commodity prices…
Stock markets – Consumer Price Index (CPI), Producer Price Index (PPI)
Inflation – rise in price over time. Deflation if decreases.
Standard of Living – How much you can buy → GDP → productivity
Quality of Life – education, health, freedom… wellbeing … happy
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Quality of Life Index
Rank | Country | Quality of Life Index | Purchasing Power Index | Safety Index | Health Care Index | Cost of Living Index | Property Price to Income Ratio | Traffic Commute Time Index | Pollution Index | Climate Index |
1 | Netherlands | 196.7 | 107.8 | 72.7 | 77.1 | 68.6 | 7.2 | 25.5 | 23.7 | 86.8 |
2 | Denmark | 194.7 | 105.0 | 73.4 | 79.2 | 78.6 | 6.6 | 28.5 | 21.3 | 81.8 |
3 | Switzerland | 193.6 | 118.7 | 76.4 | 74.5 | 114.2 | 9.7 | 28.4 | 19.6 | 79.6 |
4 | Luxembourg | 192.9 | 127.1 | 64.9 | 75.0 | 73.2 | 11.5 | 29.1 | 21.9 | 82.6 |
5 | Finland | 190.5 | 98.8 | 73.2 | 77.1 | 67.5 | 7.8 | 27.2 | 12.0 | 59.2 |
6 | Iceland | 187.5 | 90.1 | 75.1 | 67.0 | 83.3 | 7.0 | 20.6 | 15.2 | 68.8 |
7 | Austria | 185.8 | 91.2 | 72.7 | 77.2 | 66.0 | 10.3 | 24.8 | 21.5 | 77.1 |
8 | Oman | 184.7 | 108.2 | 80.3 | 58.2 | 47.8 | 3.6 | 22.6 | 37.2 | 67.2 |
9 | Australia | 183.0 | 110.9 | 54.5 | 75.3 | 75.3 | 7.5 | 36.1 | 25.4 | 93.9 |
10 | Norway | 182.7 | 95.0 | 66.5 | 76.7 | 88.6 | 8.1 | 26.7 | 17.7 | 68.7 |
11 | Germany | 179.0 | 107.6 | 62.4 | 71.9 | 62.9 | 10.7 | 31.2 | 28.8 | 83.3 |
12 | New Zealand | 176.7 | 93.0 | 54.2 | 71.0 | 72.9 | 9.0 | 31.4 | 24.2 | 96.4 |
13 | Japan | 176.3 | 100.4 | 76.9 | 80.3 | 64.6 | 10.3 | 40.0 | 39.2 | 85.3 |
14 | Sweden | 175.8 | 101.2 | 51.5 | 68.6 | 62.9 | 9.9 | 29.4 | 18.0 | 74.9 |
15 | Unite Arab Emirates | 175.7 | 123.4 | 84.9 | 69.6 | 60.3 | 3.0 | 36.1 | 48.2 | 45.8 |
16 | Spain | 173.8 | 82.5 | 64.3 | 77.9 | 50.6 | 7.8 | 29.1 | 39.6 | 93.7 |
17 | United States | 172.7 | 115.7 | 51.0 | 68.6 | 72.4 | 4.5 | 33.1 | 36.1 | 77.3 |
18 | Estonia | 171.9 | 61.4 | 74.9 | 74.1 | 54.8 | 11.8 | 23.8 | 17.9 | 64.3 |
19 | Slovenia | 169.3 | 61.7 | 75.8 | 65.3 | 50.8 | 12.1 | 26.1 | 22.7 | 77.6 |
20 | Qatar | 167.5 | 123.6 | 85.2 | 73.8 | 59.5 | 5.3 | 29.7 | 60.0 | 36.0 |
21 | United Kingdom | 166.4 | 98.9 | 53.1 | 74.1 | 61.5 | 8.3 | 34.6 | 40.4 | 88.1 |
22 | Portugal | 163.8 | 51.7 | 68.5 | 71.5 | 45.3 | 12.6 | 29.5 | 30.6 | 97.8 |
23 | Czech Republic | 163.6 | 71.8 | 73.4 | 75.5 | 48.9 | 14.9 | 29.5 | 35.3 | 78.0 |
24 | Croatia | 163.2 | 56.2 | 75.4 | 63.9 | 46.7 | 13.2 | 26.5 | 32.0 | 89.7 |
25 | Canada | 162.3 | 102.1 | 55.7 | 70.4 | 66.1 | 9.4 | 33.7 | 29.1 | 53.2 |
Determining Multifactor Productivity (MFP)…
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Productivity = Output / Input
Output
7040 Units Produced
Input costs
labor $1,000
materials $520
machine overhead $2,000
…
MFP = (7040 / 1000+520+2000) = 2 units per dollar of input
Determining Multifactor Productivity (MFP)
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Units produced: 5,000 Standard price: $30/unit
Labor input: 500 hours Cost of labor: $25/hour
Cost of materials: $5,000 Cost of overhead: 2x labor cost
Multifactor Productivity = Output / (labor + material + overhead + …)
= (5,000 x $30/h) / [(500 x 25/h) + $5,000 + {2 x (500 x $25}]
= 150,000 / 42,500
= 3.5
What is the implication if ↓productivity? ↓QOL
Productivity Growth/Decline
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Labor productivity on the ABC assembly line was 25 units per hour in 2022. In 2023, labor productivity was 23 units per hour. What was the productivity growth/decline from 2022 to 2023?
Productivity Growth
= {(Current productivity – previous productivity) / previous productivity} x 100%
= {(23 – 25) / 25} x 100%
= -8% ie ↓productivity in 2023.
④ Business/Economic Cycle
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Questions?�s.singh@uwinnipeg.ca