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Microeconomics

Microeconomics studies how consumers and suppliers make economic decisions, how these decisions determine the allocation of resources and the impact public policy has on the market. It looks at the behaviour of individual firms and households and how the supply and demand for goods and services are affected by their decisions. Microeconomics also looks at how national economic policies affect the economy. It is importnat to understand how microeconomics works in order to understand macroeconomics

In contrast to macroeconomics, which studies the economy as a whole, microeconomics looks at the interrelationships between elements of the economy, such as consumers, markets, and industries. Microeconomics analyzes the conditions that produce the most efficient level of consumption and production.

Scarcity is the main drive behind the daily choices individual consumers, producers, and suppliers make. The main goal of consumers, producers, and governments is to find a way to maximize satisfaction with the resources available. Consumer decisions are generally based on budget restraints and personal preferences.

Opportunity cost is a way to measure the cost of something, in order to determine if the something should be chosen or purchased. This is one concept that is frequently used in microeconomics.

Microeconomics helps us understand consumer and market behaviour, which is a crucial part of studying economic theory. Understanding microeconomics helps us to maximize resource utilization, build on welfare economics, and provide methods for assessing economic policies.

Categories within Microeconomics

Demand & Supply

Postings: 828

Demand and supply in microeconomics is related to having enough products to sell in order to meet consumer demand.

Efficiency & Equity

Postings: 16

Efficiency and equity are conditions of a mixed economy that are seen as microeconomic goals.

Utility & Demand

Postings: 64

The relationship between utility and demand falls under the theory of consumer behaviour.

Preferences & Choice

Postings: 35

In economics, preference refers to the assumptions of a product’s alternatives, relating to the degree of satisfaction or utility that the product gives the consumer.

Output & Costs

Postings: 948

When looking at output and costs, the positive slope of the aggregate supply curve shows us how costs and prices are related to output.

Production

Postings: 352

Production is the act of creating output that is used and valued by consumers.

Uncertainty

Postings: 47

Uncertainty is related to the accuracy of the economic model that tries to determine levels of growth and is tied to most fields in economics.

Production, Unemployment and Inflation

1. Suppose that in 2013, the economy produced 10 shirts at $20 each and 5 hamburgers at $5 each. In 2014, the economy produced 15 shirts at $21 each and 10 hamburgers at $6 each. 2. What is the value of real GDP produced in 2014 using 2013 as the base year? 3. What would be the growth in real GDP? 4. Why is there unemployme

Basic Concepts in Elasticity

1. For a particular product, a demand elasticity is a quantitative measure that shows: the absolute change in quantity demanded relative to the percentage change in any of the other variables included in the demand function for that product. the percentage change in quantity demanded relative to the absolute change in any

Monopoly in the Gas Market in Newland County

You may sketch the diagrams by hand or using a computer program, whichever you find most appropriate. Where explanations are needed please make sure that they contain all the necessary information and are detailed.

Marginal Utility and Optimal Consumption

The attached table displays George's consumption of soda pop and pretzels. The price of each soda pop is $2.00 and the price of each pretzel is $5.00. A. Fill in the missing total utility, marginal utility, and marginal utility/price (MU/Price). Place the final answer for each in the correct shaded area within the table.

Economics: Price Elasticity Questions

This analysis assessment has three parts. It is required to show the formula prior to your complete calculation. Part I. Using the midpoint method, calculate and interpret the price elasticity of demand for the following situation: a.When the price of oranges increases from $1.00 per pound to $1.50 per pound, quantity demand

Total Revenue with Perfect Price Discrimination

Calculate the total revenue without price discrimination as well as with price discrimination, and put the data into the table below. Price____Qd____TR____TR (with perfect price discrimination) 20______ 0_____ -- ____ -- 18______12_____ ? ____ ? 14______18_____ ? ____ ? 10______26_____ ? ____ ? 7_______33_____ ? __

Calculating costs for a bread factory

You are the owner of a small bread factory and are thinking of lowering costs and expanding. Your small-business advisors suggested that you first review your operations and make some technological changes. Complete the following: Explain what a technological change is and how you can use it to lower your costs. The next thi

Applying elasticity concepts

Question 1 1. Which of the following is an important factor that tends to affect the magnitude of the own-price elasticity of demand for a good? a. The availability of substitutes b. Time c. The expenditure share d. The useful economic life of the good e. All of the above Question 2 1. In the process of identify

Stackelberg Equilibrium & SPNE

Please help me with the following: 5. Suppose that inverse demand is given by D(Q) = 56 − 2Q, Q = q1 + q2 and the cost function is TC(qi ) = 20qi + f Find the Stackelberg equilibrium and compare it to the Cournot equilibrium. 6. Demand and costs are as given in the preceding question. (a) Find the limit ou

Hiring and Productivity

Most firms require labor to produce output. The number of workers to hire is often an important decision of the firm because it affects the costs and profits of the firm. Write on the following issues: 1. Suppose you are the manager of the firm. What advice would you give the owners to raise the productivity of its labor? Be

Game theory and fast food restaurants

Fast food restaurants tend to cluster together. That is, on one corner, there may be four similar fast-food restaurants. a) How game theory explain this behavior? b) If you were the manager of one of this fast food restaurants, what could you do to maximize profits?

Decisions for Profit Maximization

Managers make decisions with the expectation that profits will increase. Illustrate with one example the managerial problem and the rule or logic the manager should do in order to make a decision that will maximize profits.

Higher Markup

Which product would tend to have a higher markup in a supermarket, cigarretes or Colombian coffee? Explain. And what about Apple computers and HP computers in an electronics store?

Reducing total cost

Please can you help me understand the concept below? You work for a division of a textbook publisher that manages the company's economics textbooks. Senior managers have instructed you to find a way to reduce your division's total cost by 30 percent. Currently, your division handles three principles textbooks that are purchas

New Restaurant Concept

For the last 10 years, you have been working in the health food business. You have talked to many customers who have suggested a new restaurant concept. The restaurant would feature a variety of low-calorie meals (under 500 calories) made from healthy ingredients (e.g., organic fruits and vegetables and steroid/hormone free meat

Price Discrimination Strategy for trendy bar and electronics store.

You have been hired to be a consultant on pricing strategies for two different companies. Both of the companies have similar customer bases in that their customers fall into two well defined groups: college students and young well-paid professionals. The first company is a trendy bar. The bar is currently seeing many young w

Advanced Pricing Techniques

The Wall Street Journal is purchased both by general readers, but it also offers student pricing through universities. Weekly demand from general readers is given by DG = 1.2 - 0.01Q, and from students is DS = 0.8 - 0.01Q. Q is in thousands of newspapers. The cost of production doesn't differ between types of readers, and is giv

Net Present Value: Two-Period Project

A two-period project has the following probabilities and cash flows. The discount rate is 7%, and the initial investment is $1,000. How much is the expected NPV of this project? Probability Cash Flow Period 1: 10/3% 400

Effect of Currency Appreciation on Imports and Exports

Suppose the US dollar appreciates in its value against the Euro. (a) If you were exporting US made products to Europe, what would happen to prices of your exports? (b) If you were importing to the US products made in Europe, what would happen to the prices of your imports?

Complete the following table for the firm below which is selling its product in a perfectly competitive market and hiring labor in a perfectly competitive labor market. State how many workers the firm will hire at various wages. Explain.

Complete the following table for the firm below which is selling its product in a perfectly competitive market and hiring labor in a perfectly competitive labor market. State how many workers the firm will hire at various wages. Explain. TP = Total Product MP = Marginal Product MRP = Marginal Revenue Product

Linear Program Modeling: Case Study on Pine Furniture Company

The Pine Furniture Company makes fine country furniture. The company's current product lines consist of end tables, coffee tables, and dining room tables. The production of each of these tables requires 8, 15, and 80 pounds of pine wood, respectively. The tables are handmade and require one hour, two hours, and four hours. Each

Tax Rates: Proportional, Progressive, Regressive

Suppose a special tax was introduced that used the value of one's automobile as the tax base. Each person would pay taxes equal to 10 percent of the value of his or her car. Would the tax be proportional, progressive, or regressive? What assumptions do you make in answering this question? Do you think the tax that was imposed ei

Industry supply curve

The short-run industry supply curve for a perfectly competitive industry is the ? a) horizontal sum of the individual firms'marginal cost curves above AVC. b) vertical sum of the individual firms'marginal cost curves above AVC. c) horizontal sum of the individual firms'marginal cost curves above ATC. d) vertical sum of the