...Introduction: The real estate market is one of the essential components of any national economy. Without the real estate market may not be the market in general as well as the labor market and the capital market by themselves without property are unlikely to exist, as even financial institutions (banks, stock exchanges, investment companies, etc.) must be part of the real estate market to purchase or rent space required for their activities. The development of the real estate market depends on many factors, among which in the first place there are supply and demand. But as every market, real estate one cannot be perfect. Most disastrous situation is appeared at the Honk Kong. The Hong Kong government is trying to curb the price of the houses rise that already counts to 42% by the last 1.5 year. Just this year, home prices rose by 10,5%. It is assumed that by the end of 2012, prices will increase by 12% (HKSAR, 2011). This issue creating a possibility of bubble appears at the property market. This essay will explain main patterns of this issue and provide an explanation of it by the using demand and supply theory (part 1 of the essay), as well as describing some of the possible consequences if this situation will not change in recent time(part 2 of the essay). Part 1: Is it has been mentioned before that real estate market are mainly based on the supply and demand theory. According to Oreste(1997), main property of the demand is that, when there is existing immutability of all...
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...AIU Abstract This paper’s objective is to discuss the differences between microeconomics and macroeconomics and examples of each. It will discuss a personal microeconomic example with the factors that contributed to the decision. It will also discuss an example of a macroeconomic phenomenon and the results of the decision. Economics for the Global Manager Microeconomics is an analysis of how individuals and firms will make themselves as successful as possible in a world of shortages and the penalty of those individual decisions for markets and the entire economy. It will study how individuals and firms make decisions and how the individual decisions will affect markets (Perloff, 2012). Macroeconomic is an analysis of the performance of the whole economic system. It can forecast the national income by studying the major economic factors that have predictable patterns or trends and the influence they have on one another. The factors used are prices, balance of payment positions, gross national product, and employment / unemployment (Macroeconomics, 2013). The difference between microeconomics and macroeconomics is clear. Microeconomics is the study of the individuals / firms markets. It looks at the allocations of resources and the prices of goods. Macroeconomics is a study of the whole economic system. It looks at gross national product and how it affects unemployment. A microeconomic phenomenon example is taking a looks at a specific company to determine how they...
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... PRINCIPLES OF MICRO-ECONOMICS COURSE OUTLINE – FALL 2012 CREDIT HOURS DURATION DEPARTMENT COURSE LEVEL RESOURCE PERSON OFFICE HOURS E-MAIL 3 17 weeks Finance and Business Economics Division Core Prof. Taimoor Qureshi By Appointment taimoor.qureshi@ucp.edu.pk COURSE DESCRIPTION Principles of Microeconomics is an introductory course that teaches the fundamentals of microeconomics. This course introduces microeconomic concepts and analysis, supply and demand analysis, theories of the firm and individual behavior, competition and monopoly, and welfare economics. Students will also be introduced to the use of microeconomic applications to address problems in current economic policy throughout the semester. COURSE OBJECTIVES After studying this course the students should be able to: Understand the basic concepts of the subject. Understand the application of the tools of demand and supply for efficient resource allocation and profit maximization. Identify core economic issues related to business firms. Comprehend the benefits of market efficiency. GRADING PLAN TYPE Quizzes Assignments Final Projects Midterm examination Final term examination Total PERCENTAGE (%) 10 10 10 30 40 100 CALENDER OF ACTIVITIES WEEK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 CONTENTS TASKS/ACTIVITIES Introduction to Economics • Basic Concepts – I Class Introduction Introduction to Economics • Basic Concepts...
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...Analyzing Competitive Market Conditions and Formulating Strategies ECO/365 Reflection on Fundamentals of Microeconomics The study of macroeconomics and microeconomics provides the fundamental tools to assists business owners and finance managers in the decision making process. These tools also assist us in understanding how organizations and the economy operate as a whole. Many factors affect supply and demand. Price is the main factor that affects the supply and demand levels, this change can be reflected by a movement along the supply or demand curve. Factors that are not related to price, will shift the entire supply or demand curves. Before a firm decides to make changes in the price of their goods, it must determine the price elasticity of demand for that good. In this reflection paper, each team member will evaluate and discuss important economic concepts covered during week one. Discussions will also include any topics that members are having difficulty understanding. The portion I am having difficulty understanding is the production possibilities curve. I understand that in order to produce more of one item, you must give up some level of the production of another item. My problem is that I am not able to interpret all of the points in the production possibilities curve graph. (Maritza) Macroeconomics is the study of economies based on a national, regional and global scale. It measures the performance, structure, behavior, and decision-making...
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...Running Head: Microeconomics and the Law of Supply and Demand Microeconomics and the Law of Supply and Demand ECO/365 February 12, 2012 Supply and Demand Simulation This week our facilitator assigned each student to participate in an economics simulation that allowed us to be in control over a property management company, named Good Life Management. In this simulation the student was able to use experimental economics and natural experiments. Atlantis is the city in which Good Life Management operates their seven apartment complexes. Atlantis is also a very desirable place to live, and keeps prices competitive. The simulation changed the economic, social, and political factors, and left the student to determine the correct market price to list the apartments. According to Colander, D. (2010) “Theories, models, and principles must be combined with knowledge of real-world economic institutions to arrive at specific policy recommendations”. Microeconomic and Microeconomics In this simulation there were many examples of how micro and macro economics influenced supply and demand. According to Colander, (2010) “Microeconomics is the study of how individuals choice is influenced by economic forces”. In the first simulation Good Life Management had 2,000 two-bedroom apartments with 28% vacancy rate. At this point the simulations recommendation is to lower the rent amount in order to get 15% vacancy which would maximize revenue for Good Life Management...
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...Microeconomics and the Laws of Supply and Demand Introduction of Micro and Macro Economics Microeconomics and macroeconomics are used in order to help economists come to conclusions and the economy of a city, state, and country. Microeconomics is the study of the economic decisions and actions of individual people and companies according to the Merriam-Webster dictionary (Merriam-Webster, 2014). This practice is the study of economics on a small scale where macroeconomics will study the whole system (Merriam-Webster, 2014). Principles and Concepts The simulation provided for an in depth experience into an example of supply and demand in the housing market. GoodLife Management is the only apartment owner in the city of Atlantis, because of this GoodLife has a monopoly in this market. This monopoly allows more control over the pricing structure of the apartment living in Atlantis with little outside influence. Even with a monopoly there are a few things that can enhance or diminish the pricing structure of apartment living. An example given was the current state of the economy which did not provide enough income to fill the housing units with the higher rental rates therefore the rates had to be lowered in order maximize profits. Although the state of the economy as a whole is macroeconomic, the cause forces a microeconomic change in the rental rate (University of Phoenix, 2003). The simulation also creates a supply change by building new apartment complexes, which...
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...the equilibrium affect the rentals. The simulation helped students in determining rental rates, vacant apartments, and the quantity of apartments that are rented for any given month. According to the text, macroeconomics is the study of the economy in its entirety. Macroeconomics is studying unemployment, business cycles, business growth, and inflation. Microeconomics refers to studies of individuals and decisions made in business. An effect of a microeconomic result would be a higher demand for maintaining the rented properties by an increase in rented apartments and employment would increase. If Goodlife wanted to reduce the vacancy rate, lowering prices of two bedroom apartments would increase demand of the apartments. Prices of the two bedroom apartments will rise as the demand for a two bedroom apartment increases. This equates to the microeconomic effect with increased revenue for Goodlife, Increased revenue equates to more money spent building additional buildings, maintaining and up keeping the apartments to for tenants to live in. This simulation was isolated to specific area, Atlantis, and being limited to a specific area I would feel that this is a microeconomic principle. Thinking about this in macroeconomics...
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...shifts in demand and supply, the effect of a price ceiling on the quantity demanded and quantity of supplied two-bedroom apartments, and the equilibrium point as well. “Microeconomics is the study of how individual choice is influenced by economic forces” (Colander, 2010). Individuals in this case refer to both people and businesses. Two microeconomic principles that are apparent in the simulation are the supply of two-bedroom apartments for rent, and the demand for renting them. In all the scenarios, students were challenged to either increase or decrease rental rates on behalf of Goodlife Management, depending on how high or low the demand of two-bedroom apartments were. On the other hand, macroeconomics is the study of the economy as a whole and considers problems of inflation, unemployment, business cycles, and growth (Colander, 2010). The increase in population, or growth, had an impact on the apartments because there was a parallel increase in demand for rented apartments. The reason for an increase in population was the fact that a new business was opening up in Atlantis, thus creating job opportunities in the city. Because the employment rate in Atlantis was rising, the demand for renting apartments increased as well and falls into the concept of macroeconomics. At one point in Goodlife’s business, there was a supply of 2,000 two-bedroom apartments, and a vacancy rate of eighteen percent. They wanted to drop down the vacancy rate to fifteen percent, so they decreased...
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...Running head: SUPPLY AND DEMAND SIMULATION Supply and Demand Simulation Name University Supply and Demand Simulation Supply and demand is crucial concept in both macroeconomic and microeconomic settings. The week two simulation showed how a fictional apartment management company in the city of Atlantis is impacted by various economic factors. The microeconomic concepts can be categorized as changes in supply and demand and equilibrium, because these topics only affected the small apartment market in which the company operates. Macroeconomic concepts can be categorized as price elasticity and price ceilings because they have a broad impact on the overall region beyond the local apartment market. The simulation showed that a shift in the supply curve or the demand curve could cause significant changes to the economic environment. For example, if the demand curve shifted to the left, it would show a decrease in demand from consumers and cause fewer apartments to be filled. This situation occurred in the simulation due to a widespread desire for property ownership and forced the management company to lower prices to compensate. The equilibrium price became lower because demand decreased, while supply and quantity remained consistent. Similarly, if the supply curve were to shift to the right, it would indicate an increase in available apartments to rent. This situation could occur if the management company expanded the building to accommodate more units. Assuming there...
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...Supply and Demand Simulation ECO/365 – Microeconomics Atlantis is a great town to live in. There is especially a great opportunity in the rental real estate market and only one company to supply rental apartments. The key is to apply the laws of supply and demand to suit the needs of the business to be the most profitable. Two Microeconomic and Macroeconomic Principles or Concepts Scenarios one and three are microeconomic principles because they deal with the part of economics that is about single factors and the effects of individual decisions. In both scenarios levels of vacancy were individual decisions and prices were adjusted to meet the decisions expectations. Macroeconomics studies the entire economy. Colander (2010) stated, “It considers the problems of inflation, unemployment, business cycles, and growth” (p. 15). The fourth and seventh scenarios are examples of macroeconomics. The fourth scenario the population is going to grow because a new corporation is moving to town and with it many employees. This affects the entire economy of Atlantis because unemployment will go down and growth in many sectors will take place, particularly in real estate since these employees will need places to live and most will prefer to live near their place of employment. In response to this growth GoodLife’s apartment leases will go up from $1150 to $1400 because demand went up. As demand goes up prices go up but eventually, as shown in the seventh scenario, some...
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...Shikha Neupane ID: 32330 Business economics Economics is a branch of social science which deals with study of how fright merchandises and properties are assigned to please apparently infinite requirements and needs. The fundamental theory in economics is that shortage involves that selections be made. Similarly business economics is the branch of applied economics that deals with the idea of relevance to the contemporary business, in order to improve a complete understanding of the supply distribution matters opposite the business organisation and the environment that it functions in. It uses various economic theory and other quantitative methods to scrutinise a business organisation and the issues that influences the enterprise with the labour and its market. Question 1 Business Economics is a useful toolbox for understanding the business environment and making better decisions. Consider you are the managing director of a manufacturing company based in UK; describe the different aspects of the business that you should be looking at from an economics perspective in order to run the company efficiently. Consider both the microeconomics and macroeconomics perspectives. The entire business organisations around the globe have one similar goal and that is to increase the profit. By scrutinising the demand of the clients, supplying good quality and suitable supply, the profit can be maximised. Conversely there are various microeconomic and macroeconomic factors that...
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...define economics, microeconomics, and the law of supply and demand. The paper will identify the factors leading to a change in supply and a change in demand, and will also analyze the basis for the trends in consumption patterns discussed in the article “As US Shoppers Retreat, Can World Thrive?” The author of the paper will analyze the article by considering the utility derived from the products mentioned in the mentioned article, and will describe what has occurred to change the demand for, or the supply of, the good or service. The paper will then conclude with the market prices of the products or services. Define Economics Economics is the research and study of income, production, land, investments, taxes, government spending and labor. Economics is a study of how people choose to earn and spend their resources. The choice needs to be made individually by people and countries about what goods and services they can purchase and which ones they need to delay. Resources are scarce and are pushing people and countries to make choices. Economics is studied from two perspectives. The first being governments of nations seek to maximize the production of countries. This perspective is referred to as macroeconomics. The second perspective is of individuals and firms; this perspective is known as microeconomics. Define Microeconomics Microeconomics refers to the study of economic activity from the viewpoint of an individual firm or groups of individuals. Microeconomics studies how firms...
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...Microeconomics and the Laws of Supply and Demand ECO/365 Microeconomics and the Laws of Supply and Demand Introduction Supply and demand dictates business and determines if a business is going to be successful or not. It is also a key part of the microeconomic and macroeconomic settings in a company. This week’s simulation showed how an apartment company in the city of Atlantis is affected by the business decisions of the company and the economic factors that are going on around them. The microeconomic concepts that can be pulled from the simulation are the changes in the supply and demand of their two bedroom apartments which the company is trying to adjust. The macroeconomic concepts that can be pulled from the simulation are the price elasticity and the price ceiling that the government has set because this has an effect on the area as a whole. Both of these economic factors play a key role in business and how a business has to adapt to the changes in the economic structures around them. The Simulation The simulation brought to the light and showed that a shift in the supply curve or the demand curve or both curves could cause major changes in the economic environment of the economy around them and the company as a whole. The simulation showed that there was a demand for property, especially when Lintech Inc. moved into the area. There was a huge demand for the apartments and this caused Good life management to adjust prices to compensate for the demand...
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...Economics, like many other subjects in life, can be studied at different levels. These things can be conducted at individual level, or at a common level. What we mean by individual level is they may be by individual company, firm or an entity business person. The way the different entities behave may differ due to their different demands and supply. What we mean by decision made at a common level is that it looks at the entire activities and behavior of the entire economy. This may be at national level, regional level or even global level. Difference between microeconomics and macroeconomics Economics is primarily split into two major sections, this are the macroeconomics and the microeconomics. The two are so much connected. Adjustment in one affects the other. Both of them work together in the world of economy. The macroeconomics can be considered to be the summation of microeconomics. However there exists a difference in the two. We shall be discussing on the distinction between the two in the subsequent few paragraphs. To begin with, the naming denotes that there is a difference between macro and microeconomics.’ macro’ stands for large in Greek, while 'micro’ stands for small in Greek. This is to explain that microeconomics covers the economy of smaller regions such as a firm, a company or even individual businesses. Macroeconomics is concerned with a larger area such as regional, national or global economy. Macroeconomics studies indicators such as inflation...
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...The Affects of Monopolies on Our current Microeconomic Situation More than anything else, the progress of the world in the 21st century depends on economics. The microeconomic situation of the United States has several determining factors contributing to it's current status. What we earn, what we save, what we spend, how deligently we work and retain our jobs is all part of the microeconomic system that controls our daiy lives. Another large factor hindering the success or downfall of the current economy is the effect of monopolies. By defintion a monopoly is a large company that has exclusive control of a commodity or service in a particular market giving them the power to manipulate prices. In a sense a monopoly is the logical result of competition. The roles of a monopoly in microeconomics severly affect the manner in which individual businesses can effectivly conduct their business in more than one way. Monopolies have forever affected our economy but these following pages are more of a generalized overview of the affects they have had strictly in the 21st century. One role of a monopoly in microeconomics is the effect it has on the pricing of goods and services. Monopolies can impact consumer prices in two obviously different ways, they can cause prices to drop so low that it forces companies out of business, or it can cause prices to skyrocket making it difficult for consumers to purchase a product. Neither of these options are necessarily good for the consumers...
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