Microeconomics

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Microeconomics

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Microeconomics

...FRAMINGHAM STATE COLLEGE PRINCIPLES OF MICROECONOMICS PROBLEM SET NUMBER 2 My Name is? ________________________________________ Text Chapter 2: Page 34 3. Draw a circular-flow diagram. Identify the parts of the model that Correspond to the flow of goods and services and the flow of dollars for each of the following activities. a. Sam pays a storekeeper \$1 for a quart of milk. b. Sally earns \$4.50 per hour working at a fast food restaurant. c. Serena spends \$7 to see a movie d. Stuart earns \$10,000 from his 10 percent ownership of Acme Industrial. See Figure 1; the four transactions are shown. Figure 1 Principles of Microeconomics 1 Problem Set Number 2 5. The first principle of economics discussed in Chapter 1 is that people face tradeoffs. Use a production possibilities frontier to illustrate society's tradeoff between a clean environment and the quantity of industrial output. What do you suppose determines the shape and position of the frontier? Show what happens to the frontier if engineers develop an automobile engine with almost no emissions See Figure 2. The shape and position of the frontier depend on how costly it is to maintain a clean environment⎯the productivity of the environmental industry. Gains in environmental productivity, such as the development of a no-emission auto engine, lead to shifts of the production-possibilities frontier, like the shift from PPF1 to PPF2 shown in the figure. Figure 2 Principles of Microeconomics 2 Problem Set Number......

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Microeconomics

...Microeconomics Bryan K Hairston AIU Online Abstract My task is to compare and contrast the economic system of Michelle and James who live in as isolated region. Upon further investigation, I will explain the advantages and disadvantages of raising chicken and potatoes in this region. Microeconomics What’s Michelle’s opportunity cost of producing potatoes? Michelle has the opportunity cost of producing 50/200 = ¼ of a chicken, so the opportunity cost for Michelle is ¼ of a chicken. What is Michelle’s opportunity cost of producing chickens? Michelle has the opportunity cost of producing 200/50 = 4lbs of potatoes for every one chicken, so the opportunity cost for Michelle is 4lbs of potatoes. What is James’s opportunity cost for producing potatoes? James has the opportunity cost of 40/80 = ½ chicken per pound of potatoes, so the opportunity cost for James is ½ of a chicken. What is James’s opportunity cost of producing chickens? James has the opportunity cost of producing 2lbs of potatoes for every one chicken, so the opportunity cost for James is 80/40 = 2lbs of potatoes. Which person has absolute advantage in which activities? I think Michelle has the absolute advantage in both activities. She is able to make more chickens and potatoes than James can with the same resources. Which person has the comparative advantage in potatoes? James has the comparative advantage in potatoes. Which person has the comparative advantage in chickens? Michelle has the......

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Microeconomics

...UB18416BBU26251 INTRODUCTION TO MICROECONOMICS A Final Thesis Presented to AIU The Academic Department Of the School of Business and Economics In Partial Fulfillment of the Requirements For the Bachelors Degree in Business Administration Atlantic International University (AIU) @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @@ INTRODUCTION TO MICROECONOMICS @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @ Emmanuel Kasozi Atlantic International University (AIU) – School of Business and Economics August 15, 2012 School work, Micro economics @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ Atlantic International University (AIU) CONTENTS 1 1.0. Microeconomics and Business Markets an overview 2.0. Economics is defined 3.0. Opportunity cost 4.0. 3 Production curve 2 5.0. Microeconomics is defined 6.0. Business Markets 7.0. Market 8.0. 8 Assumptions of markets 3 Demand, Supply and market Equilibrium 9.0. 10 Demand 10.0. Factors influencing Demand 11.0. Demand curve 12.0. Ceteris Paribus 4 13.0. Supply 14 14.0. The law of supply 15.0. Supply schedule 16.0. Supply curve 17.0. Factors influencing supply Atlantic International University (AIU) 18.0. Equilibrium 19.0. Reference 21 MICROECONOMICS AND BUSINESS......

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Microeconomic

...order to buy an additional unit of hotdog. If Max gives up 1 hamburger, he can buy 2 hotdogs. In other words, there is a 1 to 2 trade off for two hotdogs Max buys he has to forego buying 1 hamburger. Both the budget line and PPF shows the boundary between those combination of goods and services that can be produced/purchased and those that cannot. Reference Question 1 Douglas F. McTaggart, Christopher C. Findlay, Michael Parkin, Microeconomics 6th ed. Page 135 – 143 Question 2 Douglas F. McTaggart, Christopher C. Findlay, Michael Parkin, Microeconomics 6th ed. Page 35– 44 Question 3 Douglas F. McTaggart, Christopher C. Findlay, Michael Parkin, Microeconomics 6th ed. Page 142 – 143 http://tutor2u.net/economics/content/topics/marketsinaction/producer_subsidies.htm http://users.hunterlink.net.au/~ddhrg/econ/ext1.html#subsidy Question 4 Douglas F. McTaggart, Christopher C. Findlay, Michael Parkin, Microeconomics 6th ed. Page 56 – 73 Question 5 Douglas F. McTaggart, Christopher C. Findlay, Michael Parkin, Microeconomics 6th ed. Page 268 – 281 http://www.scribd.com/doc/43610142/The-Effect-of-Celebrity-Endorsement-on-Consumer-Buying-Behaviour http://www.cba.ua.edu/~helder/choice.htm The graphing tool that I have used is IPAD using application called OmniGraphs...

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Microeconomics

...Final Project Microeconomics The microeconomics assignments have taught me that microeconomics is a branch of economics that studies the behavior of individuals and small impacting players in making decisions on the allocation of limited resources. Typically, it applies to markets where goods or services are bought and sold. A socialist economic system is based on some form of social ownership of the means of production, which may mean autonomous cooperatives or direct public ownership; wherein production is carried out directly for use. Where markets are utilized for allocating inputs and capital goods among economic units, the designation market socialism is used. When planning is utilized, the economic system is designated a planned socialist economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind or a direct measure of labor time as a means to value resources and goods. Islamic economics refers to the economic system that conforms to Islamic scripture and traditions. Islamic finance belongs to the category of religious ethical finance, like Christian finance. A mixed economy is an economy that combines elements of capitalism and socialism, mixing some individual ownership and regulation. Some capitalist countries employ what is often called state capitalism. In this form of a mixed economy, the state becomes a major shareholder in private enterprises. An alternative is for the state to own some industries while......

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Microeconomics

...Microeconomics  The \$20,000 Suit In an article by Michael Stetz, a Mr. Catalino a long time lawyer has orders 20,000 dolor suit to be made from the best materials in the world. This suit will have a silk lining which cost \$300, each button costs \$25. The tailor Mr. Cortese is now 70 years of age and he has at least 50 years of experience, saying he is the right person for the job is understating it. Spending this much money on a non-essential need (a want) is a great example of the Utility principle. Utility is a concept that measures the satisfaction or gratification gained by consuming any and all goods. Utility numerically measures consumer’s satisfaction what microeconomics calls cardinal utility. For Mr. Catalino the suit is not a necessity, he is splurging for a desire. Economically speaking it is a complete waste of resources to spend so much money on a suit, because he will do just as well spending only fiftieth of that money. The only valid reason for splurging is the utilitarian satisfaction that Mr. Catalino receives. Economics considers this type on item a scarce good. Because of the human condition of unlimited want and a limited source of resources some items like this suit is considered a very scares item, which of course drives the demand and increases the price. The scarcity principal states: 1. “There is not ‘enough’ to go around” 2.”I want now what I may not be able to get in the future.” Mr. Catalino understands that the materials required to......

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Microeconomic

...First microeconomic issues question that I pick would be Everyone’s gasoline problem. As we all know that the prices of the gasoline at the pump keeps fluctuate because gasoline prices related to crude oil prices. The crude oil prices make up 66 percent of the gasoline’s price and the rest of the percentage, around 34 percent would be distributed into some more costs, included taxes, and company’s profit. In order to deal with daily change of price of the gasoline, the 34 percent of the costs that they distributed usually stay stable, so by then it will be more accurate to reflect the oil price fluctuation. Oil prices affected by supply and demand as any other businesses related to supply and demand, also the price of the oil is related to commodity exchange based on the future oil price. As we know, the higher the demand on certain period of time, the higher the cost or the price of the oil/gasoline. The United States of America uses 20 percent of the world’s oil and two third of these is believe to be for transportation purposes. For future oil price, it is also depend on supply and demand in order to determine the price. If traders think the demand will be high, of course this will raise the price of the oil. There are few factors that cause the gasoline price to quickly rise and fall in a short period of time, included supply, demand, and competition as well as federal, state and local regulations. These policy makers will be the one that evaluate and choose......

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Microeconomic

...entry which may limit the number of firms in an industry and ensure only one existence of monopoly, and thus reduce competition (Arnold, 2006). For such understandings about market structures defined in the microeconomics, coffee bun belongs to monopolistic market. In this market, there are a lot of coffee bun producers such as PaPa Roti, Roti Mama, Roti Mum, Baker’s Boy, Mr. Bun and all sorts of bun shops all over the places. The price is set up differently from difference producers. For example, Roti boy is at RM 1.8; while coffee bun in Tesco is at RM 1. However, the product is homogenous and the producers compete with each other to the same amount of consumers. The ingredient to make the coffee bun can be easily accessed from every supplier. And one more, no firm in this industry has a power to prevent the entry and exit of the newcomers or existing firms from exiting or entering the market. 2. Reasons for withdrawing from Singapore RotiBoy has entered Singapore since 2004. It used to be a fad of new buns which many consumers are willing to queue up to get one bun. However, it is slowly fad away and now RotiBoy chose to withdraw from Singapore. The question rises why RotiBoy fails to operate in Singapore. Let’s go to explore the reason in terms of microeconomics. 3.1 Tastes and preferences Tastes and preferences of consumers have a direct impact on the quantity demanded (Sloman, 2003). Tastes and preferences are individual’s attitude towards goods and......

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Microeconomics

...Microeconomics and the Laws of Supply and Demand Joel Dominguez ECO/365 July 30, 2015 Billet Microeconomics and the Laws of Supply and Demand After utilizing the supply and demand concepts simulator provided in our week 2 assignment there were many key microeconomic and macroeconomic concepts that were introduce and explained. There also appeared to be a varying shift in both the supply curve and the demand curve whenever the price for each rental unit was adjusted up and down. This simulation was definitely educational as it allowed the student to manipulate and control the prices of each unit and view firsthand what each adjustment did to the supply and demand curve chart and whether or not we met our overall goal of finding an appropriate rental rate and reached the equilibrium point. All of the information supplied will definitely correlate to my understanding of real world products that I am familiar with. As the simulation displayed, a surplus in the market exerted a downward pressure on the price of each rental unit in the city of Atlantis. On the flip side, a shortage in the market would have an opposite effect on the market and would exert an upward pressure on the price of each unit. According to the simulator, in order to find the desired rental rate and occupancy requirements, you must reach the equilibrium point of \$1050 per unit on the supply and demand curves respectively. The equilibrium is the point at which the quantity demanded is equal to......

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Free Essay

Microeconomics

...AFRICA NAZARENE UNIVERSITY NAME: IAN GATHAIYA MUHORO ID NO: 08JBT021 UNIT: MICROECONOMICS UNIT CODE: BCM 104 LECTURER: PETER MUHIA TOPIC: ANALYSIS OF THE FACTORS OF PRODUCTION DUE DATE: 14TH JUNE 2012   PRODUCTION INTRODUCTION According to David N Hyman, (1989), production is the process of using economic resources or inputs in order to produce output. The transformation of raw materials into finished goods or services has been a major factor in any economy as this is the major attributes that has help build today’s economy since the beginning of most economies worldwide. Production on its own is insignificant as there are several factors to consider when producing the end product. This is what is known as the factors of production. FACTORS OF PRODUCTION There are several factors of production to consider. They are; a) Capital b) Scarcity c) Technology d) Cost of production e) Opportunity cost f) Fixed cost and variable costs g) Production possibilities h) Resources i) Price The above factors each affect production in their own way. A deeper look into them will reveal each of these factors’ contribution to the production process. A. Capital Capital, according to Ronald M and Robert A, (2003), this is anything that is produced in order to increase productivity in the future. Along with human capital, there is physical capital, which includes buildings, machinery and other equipment. Capital can also be monetary which is required to boost......

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Free Essay

Microeconomics

...Microeconomics Dana Ponomarenko Homework #5 1. It is probably practiced already; however, I believe it is rational to sell innovations on auctions. I cannot think of any specific product, as it can be any – new watch, new “super functional” table, or robot. There are companies that produce technologies like electronic devices; there are companies produce furniture, and are clothe producers. All sellers work on new, updated, improved technology and quality. Before brand new product is sold in mass markets it should be tested so that the producers know what price people are ready to pay, how desirable product is, plus they can get the feedback. If we consider, for example, robots that are nowadays developed so they can move as humans, speak, and perform useful functions. Even though they are not yet produced for mass market, there are people who work hard on developing and building them. Having spare money, it is rational to spend it for experimental use, entertainment or any other need, thus motivating and helping scientists to work further for future progress. In this situation both benefit. Scientists would get funding, see the demand level, and feedback from ordinary people. Buyer will have latest innovation that might be useful performing some work. 2. Buying travels at tourism companies in an example of asymmetric information. For example, you buy 10 days tour. You can get description of a hotel, excursions and services for a certain price; however, in practice......

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Microeconomics

...Week 2 Assignment: Raise or Lower Tuition? ECO 204: Principles of Microeconomics August 10, 2014 For this week’s assignment we have to assess how to increase the total revenue for a university by raising or lowering the tuition. As a consultant hired to help Nobody State University, I will assist in helping the university find the appropriate solution to help the university survive by changing the cost of tuition. Assess a raise in tuition and if it will necessarily result in more revenue. Raising the tuition at the university would not necessarily result in more revenue. When the price of tuition increases it will cause students to drop out; if the school is trying to keep the same number of students enrolled this will be a problem. However, if they are looking to decrease their enrolment while still increasing their tuition cost they could see an increase in revenue but not much. I would see the university’s goal as getting the most amounts of students to pay the higher tuition fees. Describe the conditions under which revenue will (a) rise, (b) fall, or (c) remain the same. Price determination is a difficult decision; one that should establish a tuition that retains current students, attracts new students, and provides adequate revenues to cover costs. (Byran & Whipple, 1995) Rise Conditions under which revenue will rise would be if the enrolment of students remains the same and rises. The university will have look at other factors that will make......

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Microeconomics

...Introduction: Research and analyze the effects of the following government policies on the market equilibrium. Increases in the Minimum Wage Restrictions on International Trade Pollution Controls Natural Monopolies and Antitrust Regulation When analyzing these policies, include some discussion of the following points when appropriate: What is the purpose of the policy? Why is the policy necessary? The welfare of consumers, producers, and society (the winners and losers) before and after the policy The distribution of costs and benefits Does government intervention improve the situation? Course Objectives Tested: 1. Explain key microeconomic terminology. 2. Differentiate between microeconomics and macroeconomics. 3. Create and use economic graphs and numerical models to analyze and solve microeconomic problems. 4. Explain the costs and benefits of international trade, including calculation of gains from trade. 5. Analyze the impact of government activity in markets. 6. Determine optimal consumer buying decisions in the context of utility theory. 7. Compare and contrast optimal pricing and output decisions in various market structures. 8. Apply supply and demand theory to both product and factor markets. PROJECT SUBMISSION PLAN |Project Part |Description/Requirements of Project Part | |1 ......

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Microeconomics

...Microeconomics Paper One Renee Ingram Chamberlain College of Nursing Econ312: Principles of Economics Spring 2013 MICROECONOMICS 2 Every day individual consumers make choices for products they feel are needed in their lives. Whether out of comfort or necessity, the choices made can determine the standard of living for the individual. Research by McConnell, Brue, and Flynn (2012) argue, “Even though biologically people need only air, water, food, clothing and shelter,” once these basic needs are met, the other items desired are only to make one’s life more comfortable (McConnell, Brue, & Flynn, 2012). However, the choices made by these individuals have one obstacle, and that is how does one chose to use limited resources so as to satisfy these unlimited wants. This is where the idea of economics comes into play. Economics is defined as the basic study of supply and demand of goods in a market structure, and how this market is driven by self-interests of individual consumers for their unlimited wants. For consumers, McConnell, Brue, and Flynn (2012) suggest, “Individuals look for and pursue opportunities to increase their utility---they allocate their time, energy, and money to maximize their satisfaction” (McConnell, Brue, & Flynn, 2012). Since goods or services are limited, the self-interest of individuals will drive them to choose one product or service over another in order to maximize their comfort. Bearing in mind the above......

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