AIR TRANSPORT ECONOMICS

The Scope of Economics

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.1
MODULE OBJECTIVE
q At the training centre, given the training manual, the
trainee will explain the scope of economics.

q In accordance with part III of NCAT training manual.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.2
INTERMEDIATE
OBJECTIVES

q Explain the concept of micro economics

q Explain the concept of macro economics

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.3
THE SCOPE OF ECONOMICS
q There are two major divisions of economics:
microeconomics and macroeconomics.
q Microeconomics
q The branch of economics that examines the functioning
of individual
industries and the behavior of individual decision-making
units that is, firms and households.
q Macroeconomics.
q The branch of economics that examines the economic
behavior of aggregates—income, employment, output,
and so on,on a national scale.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.4
MICROECONOMICS

q Production/output in individual industries and businesses

ü How much steel
ü How much office space
ü How many cars

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.5
MICROECONOMICS
CONT’D
q Prices of individual goods and services

Ø Price of medical care

Ø Price of gasoline
Ø Food prices
Ø Apartment rents

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.6
MICROECONOMICS
CONT’D

q Distribution of income and wealth

ü Wages in the auto industry

ü Minimum wage
ü Executive salaries
ü Poverty

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.7
MICROECONOMICS
CONT’D
Employment by individual businesses and industries

ü Jobs in the aviation industry

ü Number of employees in an Airline
ü Number of maintenance personnel

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.8
Macroeconomics

q National production/output

ü Total industrial output

ü Gross domestic product
ü Growth of output

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.9
Macroeconomics
CONT’D
q Aggregate price level

ü Consumer prices
ü Producer prices
ü Rate of inflation

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.10
Macroeconomics
CONT’D

q National income

ü Total wages and salaries

ü Total corporate profits

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.11
Macroeconomics
CONT’D
q Employment and unemployment in the economy

ü Total number of jobs

ü Unemployment rate

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.12
THE FIELDS OF
ECONOMICS
q Behavioral economics
ü Uses psychological theories relating to emotions and
social context to help understand economic decision
making and policy.
ü Much of the work in behavioral economics focuses
on the biases that individuals have that affect the
decisions they make.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.13
THE FIELDS OF
ECONOMICS CONT’D
q Comparative economic

ü Examines the ways alternative economic systems

function.
ü What are the advantages and systems
disadvantages of different systems?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.14
THE FIELDS OF
ECONOMICS CONT’D
q Econometrics

ü Applies statistical techniques and data to economic

problems in an effort to test hypotheses and theories.

ü Most schools require economics majors to take at

least one course in statistics or econometrics.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.15
THE FIELDS OF
ECONOMICS CONT’D
q Economic development
ü Focuses on the problems of low income countries.
ü What can be done to promote development in these
nations?
ü Important concerns of development for economists
include population growth and control,
ü provision for basic needs, and strategies for
international trade.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.16
THE FIELDS OF
ECONOMICS CONT’D
q Economic history
ü Traces the development of the modern economy.
ü What economic and political events and scientific
advances caused the Industrial Revolution?
ü What explains the tremendous growth and progress
of post—World War II Japan?
ü What caused the Great Depression of the 1930s?
ü After mart of COVID 19

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.17
THE FIELDS OF
ECONOMICS CONT’D
q Environmental economics
ü Studies the potential failure of the market system to
account fully for the impacts of production and
consumption on the environment and on natural
resource depletion.

ü Have alter- native public policies and new economic

institutions been effective in correcting these potential
failures?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.18
THE FIELDS OF
ECONOMICS CONT’D
q Finance
ü Examines the ways in which households and firms
actually pay for, or finance, their purchases.
ü It involves the study of capital markets (including the
stock and bond markets), futures and options, capital
budgeting, and asset valuation.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.19
THE FIELDS OF
ECONOMICS CONT’D
q Health economics
ü Analyzes the health care system and its players:
government, insurers, health care providers, and
patients.
ü It provides insight into the demand for medical care,
health insurance markets, cost- controlling insurance
plans (HMOs, PPOs, IPAs), government health care
programs (Medicare and Medicaid), variations in
medical practice, medical malpractice, competition
versus regulation, and national health care reform.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.20
THE FIELDS OF
ECONOMICS CONT’D
The history of economic thought,
ü Which is grounded in philosophy, studies the
development of economic ideas and theories over
time, from Adam Smith in the eighteenth century to
the works of economists such as Thomas Malthus,
Karl Marx, and John Maynard Keynes.
ü Because economic theory is constantly developing
and changing, studying the history of ideas helps give
meaning to modern theory and puts it in perspective.

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.21
THE FIELDS OF
ECONOMICS CONT’D
q Industrial organization

ü Looks carefully at the structure and performance of

industries and firms within an economy.
ü How do businesses compete?
ü Who gains and who loses?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.22
THE FIELDS OF
ECONOMICS CONT’D
q Law and economics
ü Analyzes the economic function of legal rules and
institutions.
ü How does the law change the behavior of individuals
and businesses?
ü Do different liability rules make accidents and injuries
more or less likely?
ü What are the economic costs of crime?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.23
THE FIELDS OF
ECONOMICS CONT’D
q Urban and regional economics

ü Studies the spatial arrangement of economic activity.

ü Why do we have cities?
ü Why are manufacturing firms locating farther and
farther from the center of urban areas?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.24
THE FIELDS OF
ECONOMICS CONT’D
q International economics
ü Studies trade flows among countries and international
financial institutions.
ü What are the advantages and disadvantages for a
country that allows its citizens to buy and sell freely in
world markets?
ü Why is the dollar strong or weak?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.25
THE FIELDS OF
ECONOMICS CONT’D
q Labor economics

ü Deals with the factors that determine wage rates,

employment, and unemployment.
ü How do people decide whether to work, how much to
work, and at what kind of job?
ü How have the roles of unions and management
changed in recent years?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.26
THE FIELDS OF
ECONOMICS CONT’D
q Public economics
ü Examines the role of government in the economy.
ü What are the economic functions of government, and
what should they be?
ü How should the government finance the services that
it provides?
ü What kinds of government programs should confront
the problems of poverty, unemployment, and
pollution?
ü What problems does government involvement
create?

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.27
THE FIELDS OF
ECONOMICS CONT’D
Air transport economics
ü Analyzes the air transport system and its players:
government, insurers, survive providers, and
stakeholders.
ü Studies trade flows among countries and international
aviation institutions

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.28
ASSIGNMENT 1
q Analyze the relevance of the concepts of
microeconomics and macroeconomics in the Nigerian
environment (500-words (excluding references and
appendices) an individual report (standard font type and
12 point size) to be emailed to: [email protected] or
[email protected] on or before the 12 May 2020
)

Wednesday, 6 May 2020 AME ND NIGERIAN COLLEGE OF AVIATION TECHNOLOGY, ZARIA PPT 2.29