TUJUAN HIDUP MANUSIA DAN TUJUAN PEMBELAJARAN

Harus dimiliki semua orang TUJUAN HIDUP MANUSIA (MENCARI RIDHA ALLAH) Tidak bisa dilepas sesaatpun Mewarnai semua tujuan lainnya KOMUNIS (SOSIALIS) PRINSIP HIDUP IDEOLOGI ISLAM PROGRAM HIDUP (AMAL SHALEH) KAPITALIS

1. Memahami dengan baik konsep-konsep dasar Ilmu Ekonomi Makro; TUJUAN PEMBELAJARAN: 1. Memahami dengan baik konsep-konsep dasar Ilmu Ekonomi Makro; 2. Memahami konsep-konsep dasar tersebut untuk memecahkan masalah/problem ekonomi makro seperti: pengangguran, tingkat inflasi, melemahnya nilai tukar, defisit anggaran belanja negara dan sebagainya; 3. Memahami kebijakan pemerintah yang diterapkan dalam perekonomian, khusunya kebijakan ekonomi makro; 4. Memahami konsep ekonomi normatif yang seharusnya dilaksanakan dalam kegiatan ekonomi.

PENGERTIAN DAN PANDANGAN ILMU EKONOMI

PENGERTIAN ILMU EKONOMI (ECONOMICS) Inflasi Pengangguran Nilai Tukar APBN/APBD Laju Pert Ek (LPE), dst MACROECONOMICS: Is the branch of Economics which is concerned with the overall performance of the economy (Aggregate behavior) PENGERTIAN ILMU EKONOMI (ECONOMICS) MICROECONOMICS: Is the branch of Economics which today is concerned with the behavior of individual entities (Individuals behavior) Permintaan-penawaran individual (pasar) Prilaku konsumen Perilaku produsen Pasar Biaya produksi Persaingan Harga input, dst Economics is the study of how societies use scarce resources to produce valuable goods and services and distribute them among different individuals (Samuelson-Nordhaus, 2010:4)

KATA KUNCI DEFINISI ILMU EKONOMI Scarce Resources: Ilmu ekonomi itu ada (lahir) karena terdapat kelangkaan sumberdaya (scarcity of resources) to produce: Berkaitan dengan pemanfaatan sumber daya (harus efektif dan efisien = prinsip ekonomi) KATA KUNCI DEFINISI ILMU EKONOMI Valuable goods and services: Berkaitan dengan barang dan jasa yang berguna (bernilai) bagi kehidupan manusia Distribute (distribution): Berkaitan dengan fungsi pemasaran Different individuals: Pengguna barang dan jasa yang diproduksi (user), mereka cukup beragam

Scarce resources (faktor produksi): Land, labor, and capital Scarce resources (faktor produksi): Land, labor, and capital. Terdapat beberapa harga faktor produksi untuk masing-masing resources: rent untuk land; wage or salay untuk labor, dan interest untuk capital. Untuk harga capital dalam konsep syariah terdapat perbedaan. Diganti dengan konsep jual beli, sewa dan jasa.

TIGA FUNDAMENTAL PERTANYAAN EKONOMI WHAT: What goods and services are produced and what quantities? TIGA FUNDAMENTAL PERTANYAAN EKONOMI HOW: How are goods and services produced? FOR WHOM: For whom are goods and services produced? TOTAL QUALITY MANAGEMENT (TQM): Product (P) Process (P) Leadership (L) Organization (O) Commitment (C)

PANDANGAN TENTANG ILMU EKONOMI EKONOMI NORMATIF (Normative Economics) PANDANGAN TENTANG ILMU EKONOMI EKONOMI POSITIF (Positive Economics)

EKONOMI NORMATIF (VALUE JUDGMENTS) PENGERTIAN: What ought to be. What is good, and what is bad. Yaitu Ilmu Eonomi yang berbicara bagaimana seharusnya. Misalnya tentang: Satisfactory in society, preferences, feelings, standard housing, etc. CONTOH: Satisfactory in society: Terpuaskannya masyarakat dalam berbagai aspek, misalnya sarana umum yang memadai, fakir miskin mendapat perhatian yang memadai, dst Preferences: kesukaan masyarakat terpenuhi Feelings: perasaan masyarakat terjaga Standard housing: rumah yang layak, dst EKONOMI NORMATIF (VALUE JUDGMENTS) EKONOMI NORMATIF DAN LPE YANG BERKUALITAS: Bila Ekonomi Normatif berjalan dengan baik, maka LPE yang berkualitas akan tercapai, yaitu LPE yang disertai dengan perbaikan kualitas hidup dalam segala aspeknya PARADOX OF GROWTH: Yaitu LPE yang tetapi tidak dibarengi dengan perbaikan kualitas kehidupan. Misalnya: LPE tinggi tetapi pengangguran, dan kemiskinan masih tetap tinggi, kualitas lingkungan semakin rusak, dst.

HUBUNGAN EKONOMI NORMATIF DAN EKONOMI SYARIAH BILA EKONOMI NORMATIF TERCAPAI, MAKA SECARA LANGSUNG SEBAGIAN TUJUAN EKONOMI SYARIAH TERCAPAI. KESEMPURNAAN EKONOMI NORMATIF ADALAH EKONOMI SYARIAH (ISLAM)

EKONOMI POSITIF (TESTABLE STATEMENT) PENGERTIAN: What is, was, or will be? Yaitu Ilmu Ekonomi yang berbicara tentang fakta yang terjadi (matters of fact), atau bicara apa yang akan terjadi. Misalnya: - performance of economic (kinerja ekonomi) predictions and precission (perkiraan dan ketepatan) - objective of science (tujuan ilmu pengetahuan) EKONOMI POSITIF (TESTABLE STATEMENT) CONTOH KONTEKS MODEREN: Data laju pertumbuhan ekonomi (LPE), inflasi, pengangguran, prediksi ekspor dan impor, dst.

Principles of Economics Session 1

Topics To Be Covered Introduction Definition of Economics Production Possibilities Frontiers

Definition of Economics Economics is the study of how societies choose to use scarce productive resources that have alternative uses, to produce commodities of various kinds, and to distribute them among different groups.

Scarcity vs. Efficiency Economic goods are scarce or limited in supply. Free goods like air exist in such large quantities. Thus, their market price is zero. Scarcity means that an economic good is not freely available for the taking. Efficiency refers to the use of economic resources to maximize satisfaction with the given inputs and technology.

Microeconomics vs. Macroeconomics Microeconomics is the study of how individual households and firms make decisions and how they interact with one another in markets. Macroeconomics is the study of the economy as a whole with respect to output, price level, employment, and other aggregate economic variables.

Adam Smith & John Maynard Keynes Smith authored The Wealth of Nations in 1776. Founder of modern economics. Research into pricing of land, labor, and capital. Invisible hand. Keynes authored General Theory of Employment, Interest and Money in 1936.

What, How, and For Whom What is the problem of decision to produce possible goods or services. How is the choice of the particular technique by which each good of the what shall be produced. For whom refers to the distribution of consumption goods among the members of that society.

Production Possibilities Frontiers Antu Panini Murshid--Principles of Macroeconomics

Efficiency / inefficiency and unemployment Production Possibilities Frontiers A simple two-good model of production Production possibilities frontiers Use PPFs to illustrate various concepts Slope of the PPF Examples Scarcity Efficiency / inefficiency and unemployment Opportunity cost Economic Growth Concave PPF Linear PPF 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics

Production Possibilities Frontier Suppose there are only two goods... …the production possibilities frontier, is a graph showing the various combinations of output that can be produced when all resources are being utilized in the most (productively) efficient manner possible, given the current level of technology 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics

Production Possibilities in a Two-Good Economy Consider an economy that produces computers and cars How can we illustrate the production possibilities for this economy using a graph?... 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics

Attainable and Unattainable All points on or inside the frontier are attainable Point A is attainable, so is point B. In fact B is better! Point C is unattainable Production Possibilities frontier 3,000 C B Quantity of Computers Produced A Quantity of Cars Produced 1,000 5/3/2018 15

Illustrating Concepts Using a Production Possibility Frontier Scarcity Efficiency, Inefficiency and Unemployment Opportunity Cost Economic Growth 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics 21

Scarcity All points on or inside the frontier are attainable Points A and B are attainable At point C more cars and computers are being produced than at A or B But point C is unattainable. Why? Scarcity Production possibilities are bounded 3,000 C B Quantity of Computers Produced A Quantity of Cars Produced 1,000 5/3/2018 15

Efficiency, Inefficiency and Unemployment All points on the PPF are attainable if society uses all of its resources in a productively efficient manner But point A, which is not on the frontier, is also attainable. What is happening at A? Waste Unemployment Inefficiency 3,000 Quantity of Computers Produced A Inside the frontier! Quantity of Cars Produced 1,000 5/3/2018 15

Opportunity Cost B2 C B1 Start at B1—800 cars and 1500 computers Say we want to increase the number computers to 2000 At point B2 we are producing 2000 computers, but only 600 cars. To increase computer-production by 500, we must give up car-production by 200 The negative slope of the PPF implies that whenever we increase production of one good… …we must give up some of the other good 3,000 Not Possible! B2 C 2,000 B1 1,500 Quantity of Computers Produced Quantity of Cars Produced 600 800 1,000 5/3/2018 15

Economic Growth—Long Run 4,000 Over time an economy can grow More labor and capital Technological progress What happens to the PPF? Shifts outward! Previously unattainable levels of production… …now become attainable 3,000 Quantity of Computers Produced Quantity of Cars Produced 1,000 1,500 5/3/2018 15

Economic Growth–Short Run Consider an economy at point A Recession High unemployment Suppose the central bank cuts interest rates to bring the economy out of recession The economy moves to B Unemployment falls, output increases But production possibilities are unaffected 3,000 B Quantity of Computers Produced A Quantity of Cars Produced 1,000 5/3/2018 15

Why Does the PPF Bow Outward? PPF does not necessarily have to be concave! But it is reasonable assumption. Why? Because not all resources are equally suited at producing the same good Computer manufacturers make poor car makers and vice versa If more and more resources were diverted into the production of cars say, then even computer manufacturers would find themselves on the automobile assembly line. But their productivity would be low! 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics 15

Illustrating the Point Suppose we go from A to B. Production of cars is virtually unaffected, but production of computers falls by 750! Computer manufacturers are lousy at making cars PPF is steep Suppose we go from C to D. Production of computers is virtually unaffected, but production of cars decreases by 250! Car makers are lousy at making computers PPF is flat As we move up the PPF its slope decreases D C 3,000 Quantity of Computers Produced A 750 B Quantity of Cars Produced 250 1,000 5/3/2018 15

Linear PPFs The slope of the PPF…. …measures the opportunity cost of producing good X (in this case cars) in terms of good Y (in this case computers) If the PPF is linear, then the opportunity cost of producing X in terms of Y is constant at all levels of production This is unrealistic, but linear PPFs are easier to deal with 3,000 Slope = DY/DX Slope at A… Quantity of Computers Produced A DY equals Slope at B B DX Quantity of Cars Produced 1,000 5/3/2018 15

Marginal Rate of Transformation The slope of the PPF is sometimes called the marginal rate of transformation of good X (in this case cars) for good Y (in this case computers) For linear PPFs the MRTXY is constant For concave PPFs the MRTXY (o/c of X in terms of Y) increases with X 5/3/2018 Antu Panini Murshid--Principles of Macroeconomics 21

Measuring the Opportunity Cost What is the opportunity cost of producing cars? Pick any two points on the PPF… As we move from A to B… DY = -1800 and DX = 600 Slope = -1800/600 = -3 O/C of 1 car is 3 computers 3,000 Slope = DY/DX A 2,400 DY Quantity of Computers Produced B 600 DX 200 800 1,000 Quantity of Cars Produced 5/3/2018 15

Demand & Supply

MARKETS DEFINED POTENTIAL BUYERS POTENTIAL SELLERS MARKETS

DEMAND DEFINED P QD A schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices. $5 4 3 2 1 10 20 35 55 80

LAW OF DEMAND An inverse relationship exists between price and quantity demanded As Price Falls… …Quantity Demanded Rises As Price Rises… …Quantity Demanded Falls

LAW OF DEMAND DIMINISHING MARGINAL UTILITY INCOME EFFECT SUBSTITUTION EFFECT DEMAND CURVE INDIVIDUAL AND MARKET DEMAND

GRAPHING DEMAND Plot the Points P QD $5 4 3 2 1 10 20 35 55 80 P Q o Price P CORN 5 Plot the Points P QD 4 $5 4 3 2 1 10 20 35 55 80 3 2 1 Q o 20 35 55 80 Quantity

GRAPHING DEMAND Connect the Points P QD $5 4 3 2 1 10 20 35 55 80 P D Price of Corn P $5 4 3 2 1 CORN Connect the Points P QD $5 4 3 2 1 10 20 35 55 80 D o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING DEMAND What if Demand Increases? P QD $5 4 3 2 1 10 20 35 55 Price of Corn What if Demand Increases? P $5 4 3 2 1 CORN P QD $5 4 3 2 1 10 20 35 55 80 D o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING DEMAND Increase in Quantity Demanded P QD $5 4 3 2 1 10 20 35 Price of Corn P Increase in Quantity Demanded $5 4 3 2 1 CORN P QD $5 4 3 2 1 10 20 35 55 80 30 40 60 80 + Increase in Demand D’ D o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING DEMAND What if Demand Decreases? P QD $5 4 3 2 1 10 20 35 55 Price of Corn What if Demand Decreases? P $5 4 3 2 1 CORN P QD $5 4 3 2 1 10 20 35 55 80 D o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING DEMAND Decrease in Quantity Demanded P QD $5 4 3 2 1 10 20 35 Price of Corn P Decrease in Quantity Demanded $5 4 3 2 1 CORN P QD $5 4 3 2 1 10 20 35 55 80 -- 10 20 40 60 Decrease in Demand D D’ o 10 20 30 40 50 60 70 80 Q Quantity of Corn

DETERMINANTS OF DEMAND Tastes Number of Buyers Income Normal (Superior) & Inferior Goods Prices of Related Goods Substitutes & Complements Unrelated Goods Expectations

SUPPLY DEFINED CORN P QS Supply is a schedule or a curve showing the amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices. $1 2 3 4 5 5 20 35 50 60

A direct relationship exists between price and quantity supplied LAW OF SUPPLY A direct relationship exists between price and quantity supplied As Price Rises… …Quantity Supplied Rises As Price Falls… …Quantity Supplied Falls

GRAPHING SUPPLY Plot the Points P QS P o Q Price of Corn CORN $5 4 3 2 1 CORN P QS 60 5 50 4 35 3 20 2 5 1 o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING SUPPLY What if Supply Increases? P QS $5 4 3 2 1 60 50 35 20 Price of Corn P S $5 4 3 2 1 CORN What if Supply Increases? P QS $5 4 3 2 1 60 50 35 20 5 o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING SUPPLY Increase in Supply P QS $5 4 3 2 1 60 50 35 20 5 80 70 Price of Corn P Increase in Supply S’ S $5 4 3 2 1 CORN P QS $5 4 3 2 1 60 50 35 20 5 80 70 60 45 30 Increase in Quantity Supplied o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING SUPPLY What if Supply Decreases? P QS $5 4 3 2 1 60 50 35 20 Price of Corn What if Supply Decreases? P S $5 4 3 2 1 CORN P QS $5 4 3 2 1 60 50 35 20 5 o 10 20 30 40 50 60 70 80 Q Quantity of Corn

GRAPHING SUPPLY P QS $5 4 3 2 1 60 50 35 20 5 45 30 20 -- Decrease Price of Corn S’ P S $5 4 3 2 1 CORN P QS $5 4 3 2 1 60 50 35 20 5 45 30 20 -- Decrease in Quantity Supplied o 10 20 30 40 50 60 70 80 Q Quantity of Corn

DETERMINANTS OF SUPPLY Resource Prices Technology Taxes & Subsidies Prices of Other Goods Price Expectations Number of Sellers

DETERMINANTS OF SUPPLY Resource Prices Technology Taxes & Subsidies Prices of Other Goods Price Expectations Number of Sellers Combining with Demand

x x EQUILIBRIUM MARKET DEMAND & SUPPLY P QD P QS $5 4 3 2 1 10 20 35 BUSHELS OF CORN P QS BUSHELS OF CORN MARKET DEMAND MARKET SUPPLY 200 B U Y E R S 200 S E L R $5 4 3 2 1 10 20 35 55 80 2,000 4,000 7,000 11,000 16,000 $5 4 3 2 1 12,000 10,000 7,000 4,000 1,000 60 50 35 20 5 x x EQUILIBRIUM Graphically…

MARKET DEMAND & SUPPLY P QD P QS $5 4 3 2 1 2,000 4,000 7,000 11,000 Price of Corn P CORN MARKET CORN MARKET S $5 4 3 2 1 P QD P QS $5 4 3 2 1 2,000 4,000 7,000 11,000 16,000 Market Clearing Equilibrium $5 4 3 2 1 12,000 10,000 7,000 4,000 1,000 D 7 o 2 4 6 8 10 12 14 16 Q Quantity of Corn

MARKET DEMAND & SUPPLY Surplus P QD P QS $5 4 3 2 1 2,000 4,000 7,000 Price of Corn P CORN MARKET CORN MARKET Surplus S $5 4 3 2 1 P QD P QS At a $4 price more is being supplied than demanded $5 4 3 2 1 2,000 4,000 7,000 11,000 16,000 $5 4 3 2 1 12,000 10,000 7,000 4,000 1,000 D 7 o 2 4 6 8 10 12 14 16 Q Quantity of Corn

Shortage MARKET DEMAND & SUPPLY P QD P QS $5 4 3 2 1 2,000 4,000 7,000 Price of Corn P CORN MARKET CORN MARKET S $5 4 3 2 1 P QD P QS At a $2 price more is being demanded than supplied $5 4 3 2 1 2,000 4,000 7,000 11,000 16,000 $5 4 3 2 1 12,000 10,000 7,000 4,000 1,000 Shortage D 7 11 o 2 4 6 8 10 12 14 16 Q Quantity of Corn

MARKET DEMAND & SUPPLY Surplus Shortage P QD P QS $5 4 3 2 1 2,000 Price of Corn P CORN MARKET CORN MARKET Surplus S $5 4 3 2 1 P QD P QS $5 4 3 2 1 2,000 4,000 7,000 11,000 16,000 $5 4 3 2 1 12,000 10,000 7,000 4,000 1,000 Shortage D 7 11 o 2 4 6 8 10 12 14 16 Q Quantity of Corn

INFLATION

Inflation :  Inflation This is the process by which the price level rises and money loses value. There are two kinds of inflation: a) Demand pull Inflation b) Cost push Inflation

Demand pull inflation : Demand pull inflation , may be due to : Increase in money supply and Increase in government purchases Increase in exports Cost push Inflation :  Cost push Inflation Cost push inflation may arise because of : Increase in money wage rates Increase in money prices of raw materials.

AD’ P AS AD P’ E P E O Q’ Q Q Demand pull inflation : Demand pull inflation , may be due to : Increase in money supply and Increase in government purchases Increase in exports AD’ P AS AD P’ E P E O Q’ Q Q

AS’ P AS AD E’ P’ P E O Q Q’ Q Cost push Inflation : Cost push Inflation Cost push inflation may arise because of : Increase in money wage rates Increase in money prices of raw materials. E’ P’ P E O Q Q’ Q

AD’ AS’ P P AS AD AS AD P’ E’ P’ E’ P E P E O Q Q’ Q O Q’ Q Q DEMAND PULL INFLATION COST PUSH INFLATION AD’ AS’ P P AS AD AS AD P’ E’ P’ E’ P E P E O Q Q’ Q O Q’ Q Q

CREEPING INFLATION. WALKING INFLATION. RUNNING INFLATION. THE BASIS OF RATE OF INFLATION: CREEPING INFLATION. WALKING INFLATION. RUNNING INFLATION. HYPER-INFLATION.

Government Set Prices Price Ceilings Shortages Rationing Problem Black Markets Rent Controls Price Floors Surpluses

PRICE FLOORS

Price Controls: Two Types Price Ceiling A legally established maximum price at which a good can be sold. Price Floor A legally established minimum price at which a good can be sold. 4 4

Price Floors When the government imposes a price floor, two outcomes are possible. The price floor is not binding if set below the equilibrium price. The price floor is binding if set above the equilibrium price, leading to a surplus. 12 15

A Price Floor That Is Not Binding... Price of Shave-Ice Cone Supply Equilibrium price $3 Price floor 2 Demand 100 Quantity of Shave-Ice Cones Equilibrium quantity 8 17

A Price Floor That Is Binding... Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. A Price Floor That Is Binding... Price of #2 Wheat Supply Surplus $4 Price floor 80 Quantity demanded 120 Quantity supplied $3 Equilibrium price Demand Quantity of #2 Wheat 8 17

Effects of a Price Floor A price floor prevents supply and demand from moving toward the equilibrium price and quantity. When the market price hits the floor, it can fall no further, and the market price equals the floor price. 15 24

Effects of a Price Floor A binding price floor causes . . . a surplus because QS >QD. nonprice rationing is an alternative mechanism for rationing the good, using discrimination criteria. Examples: The minimum wage, Agricultural price supports 15 25