...Supply and Demand Microeconomics and macroeconomics are both very similar and they both effect economic decisions made by people. Microeconomics focuses on the individual, or the household, and how they make financial and economic decisions. Macroeconomics focuses on the economy, and people, as a whole. It studies what society does financially as a whole. I read the exercise and I also watched the video, but this paper will focus on the video we watched about the apples and pears. There were several microeconomic principles presented in this video. One example of a principle of microeconomics is the increase in demand of apples after apples were said to cure cancer. This causes more people to want to purchase apples. This increase in demand increases the price as well, and the increase in price will cause the supply to go up to. The video also showed an example of how supply can shift as well. In the first example, there was a new invention that helps to prevent apples from disease. This helps the growers out immensely and they are now able to produce and sell more apples. This change in supply causes the supply curve of apples to increase to the right. This shift in quantity supplied causes the price of apples to drop. Both of these are examples of microeconomics. The decision on whether to purchase apples is up to the consumer, or individual, and is based on the price of apples or the benefits of apples. A consumer will always buy the cheaper product or they...
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...of competitors. Careful market research has revealed that the St. Louis market is composed of two micromarkets. The first comprises business travelers; the second comprises vacation travelers. The demand curves for these two micro-markets are given below: Micro-market Business travelers Vacation travelers Demand curve equation Q1= 3,600 – 20P Q2= 3,000 – 30P In the table above, P is the daily rental rate, while Q1 and Q2 are the numbers of vehicles rented per day by business travelers and vacation travelers, respectively. Like airlines, the rental car business is one in which the marginal cost of serving an extra customer is nearly zero. For this reason, throughout this exercise, we will assume that your client’s MC = 0. (Of course, your client has fixed costs, but as an astute practitioner of microeconomics, you know that these fixed costs are not relevant to the pricing decision, and so throughout this analysis, we can safely ignore them.) Because MC = 0, whenever, we talk about “profit contribution,” we are actually talking about total revenue. The Deliverables Please complete each of the following tasks. While you do not need to show every step of algebra that you used to...
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...Economics, Microeconomics - Other Microeconomic issue Consists of performing application-oriented exercises wherein the specific economic principles learned in this course are put to practical use. You must translate your ideas into economic analysis using the specific economic theory and economic terms. Choose of one topical microeconomic issue out of two possible alternatives. Choose one of the following two microeconomic issues: 1. Everyone's Gasoline Problem. We are all familiar with fluctuating prices of gasoline at the pump. Why does this happen? Research the recent history of gasoline pricing in your area, and attempt to relate any fluctuations you observe to documented supply and demand factors, as outlined in our book. Be sure to cite any references used. 2. Ethical Issues in Business. It seems that every day lately we are confronted with a new company that has acted at least unethically and possibly illegally in the operation and financial reporting of their company's business dealings? Briefly discuss one of these issues. How would you expect this to affect the equilibrium price and equilibrium quantity for this company's products and services? Is the elasticity of demand or supply affected? What about the effect on production levels and costs? Are ethical issues more likely to occur in one market type rather than another market type? You don't have to cover all of these topics. Created: Jan 11, 2010 1:29 pm Solution By OTA: 105368, Zaitun Mogri...
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...three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes. Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the study of aggregates or averages covering the entire economy, such as total employment, national income, national output, total investment, total consumption, total savings, aggregate supply, aggregate demand, and general price level, wage level, and cost structure. In other words, it is aggregative economics which examines the interrelations among the various aggregates,...
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...Microeconomics has a role in society as well as in the economy of a region. This field of study allows economists to determine not only the patterns of consumers, businesses, and other organizations that are spending money but also the factors that are affecting spending habits and production decisions. Microeconomics involves studying the concepts and ideas that establish supply and demand in a particular market and the way that consumers and businesses alike prioritize their spending. Essentially, the role of microeconomics is to determine how, when combined, small economic components are affecting the broader economy. Instead of looking at market indicators that represent a wide field of data, however, this type of study considers how individuals, households, or specific markets are responding to markets. Although this economic approach does not necessarily reveal or determine economic conditions, the process offers insight into the way that consumers and businesses alike decide the value of a particular product or service. This is expressed in the amount of resources that either the consumer or business dedicates to an item. Rather than tallying the way that consumers as a whole are responding to a particular product, for instance, microeconomics begins with the study of the extent of demand stemming from one single consumer. Once this demand has been determined, this study continues and expands to include a greater number of individuals in the assessment. Economists also...
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...effects of a government policy by using consumer and producer surplus. Unit 1 Introduction In this Unit, we will learn a new mathematical technique. By using this technique, we calculate marginal cost, marginal revenue, and the optimal output the competitive firm will produce. Learning objectives Upon completion of this unit you should be able to: • define the derivative of basic functions; • use derivatives to calculate marginal revenue and marginal cost; and • use derivatives to calculate a competitive firm's supply function. Assigned reading/viewing/listening Microeconomics, Eighth Edition textbook and study guide – Chapters 8. How to proceed 1. Read the PowerPoint slides of Chapter 8 to get a brief idea about the chapter. 2. Read chapter 8 carefully. 3. Solve the provided problems on the textbook's companion website. 4. Solve exercises at the end of chapter 8 in your textbook. Key words and examples Derivation technique A function shows a relation between two variables. For example, y=f(x)=2x is a function and it is describing the relation between variables x and y. As the variable x takes values, we can determine the value of y. In this case, when x=1, y = 2 x = 2. 1 = 2. Or when x=2, y=2x=2.2 = 4. In economics, we use functions to describe the relation between cost and quantity, or quantity...
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...Supply and Demand Simulation Leticia Shamma ECO/365 July 24, 2013 Karl Bitter Supply and Demand Simulation The Supply and Demand Simulation was very insightful. I related to it since I am in property management although I did have some difficulty with the reasoning. The simulation was designed to help us understand demand and supply as well as the effect of a price ceiling on a specific quantity as well as the quantity supplied. According to our textbook, Microeconomics is the study of individual choice and how that choice can be influenced by economic forces. In this simulation, the city of Atlantis has a property management company by the name of Goodlife Management who is responsible for leasing two bedroom apartment homes that are in high demand. The two microeconomics principles are the supply of the two-bedroom apartments and the demand for renting them. Macroeconomics is the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth. The macroeconomic principles that are a factor is the increase in the population and growth of the city that has caused an increase in the demand of the apartments. The increase of the population had to deal with the economy because of a new business opening up and therefore creating job opportunities. Since the city of Atlantis ‘employment rate is rising the demand for the apartments will increase and decrease as is the concept of macroeconomics. The simulation accurately details...
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...extensive unacknowledged quotation or paraphrasing or by direct copying of another person's work” • secondly to allow you and whoever is assessing your work to be able to easily trace the original source if need be. You need to refer to your sources in two places- • in the body of your work • in the list of references at the end. What follows shows you how to do this for various types of material: books, journals and electronic resources, preceded by a section on how to deal with quotes. The Harvard system of referencing is used for printed sources. At present, this does not cover electronic sources, but we will be using a commonly used set of guidelines for the latter. Please read through the handout, and try the practical exercises in Parts 1.3, 1.4 and 1.5 1.2 Using Quotations The following guidance on using quotations applies to all forms of material – books, journals and electronic items. It is appropriate to use quotations to support or illustrate points you wish to make in your assessed work, but they should be used relatively sparingly, and should be as brief as possible. The Harvard system requires you to use the author’s name, and then in brackets the year of publication and the page number on which the quote appears. Quotations of more than two lines in length should be indented. Note the use of the colon as well as to mark the boundary between your own words and the...
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...University of Newcastle ECON1001 Microeconomics for Business Decisions TUTORIAL REVISION EXERCISES Set 3 (Week 4) Market Allocation Tut Set | | Revision Exercises | 3 | Week 4 Allocation and the market systemJ&McI (Ch. 4) | 1. What important production questions must any economy answer? A socialist state will answer the economic questions of what, how, how much, distribution, where, through government planning. 2. Use supply and demand diagrams for two products to explain how the market decides on what it should produce. Determined by competing buyers and sellers in both resource and product markets (SS/DD) 3. What is the difference between a normal profit and positive economic profit? PROFIT = Total Revenue – Total Cost Accounting Profit Total revenue minus total eplicit costs Economic profitTotal revenue minus explicit plus implicit costs 4. # Why are economic profits and losses important in determining which industries are expanding and those that are contracting? CH.4, pp. 102-103Economic profits and losses are important in determining which industries are expanding and contracting because economic profits induce new firms to enter the industry, in order to get higher profits or if it is below normal profit this induces firms to leave to get normal profits elsewhere.When new firms are entering the industry this results in an expanding industry, this increases the market supply of the product which causes for prices to drop until...
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...concavity/convexity test using the derivative conditions. 2. Consider the function: y = 2x. a. Determine the average rate of change of the function in the closed interval [1,4] of the argument. b. Determine whether the function is concave or convex, using geometric test and a specific value of ( = 0.3. c. Do the concavity/convexity test using the derivative conditions. 3. Use the derivative condition to test whether the function y = 8 + 10x - x2 is concave or convex over the domain [0,7]. 4. In a cross-country study of the relationship between income per-capita (Y) and pollution (S), Grossman and Krueger estimate a cubic relationship as S = 0.083Y3 - 2.2Y2 + 13.5Y + X, where X represents other factors not linked to income. For this exercise, consider X as a fixed quantity for a country. Identify and characterize the extreme values of this function. 5. In the model of perfect competition, all firms are price-takers since they treat price (P) as a market-determined constant. Assume that P = 12. A firm's total revenue (TR) function is TR(Q) = P ( Q, where Q is the quantity of output of the firm. The total cost (TC) function of the firm is TC(Q) = Q3 - 4.5Q2 + 18Q - 7. a. Determine the firm's profit (() function. (Hint: ( = TR - TC) b. What quantity of output (Q) the firm should produce in order to maximize profits? c. Confirm that this quantity represents maximum profits for the firm by using the second-order...
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...1.0 Introduction: The spectrum of competition ranges from perfectly competitive markets where there are many sellers who are price takers to a pure monopoly where one single supplier dominates an industry and sets price. We start our analysis of market structures by looking at perfect competition. Firms operate within their market, which consists of: Supply side: all of the firms producing similar products Demand side: all buyers willing to purchase the products Markets differ; the auto market is far different from the tomato market, for example. Thus economists separate markets into 4 categories: perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition: There are many, many small sellers (technically, there must be an infinite number of sellers), each of whom produces an identical product. It is very easy for new sellers to enter this market, and it is easy for existing sellers to leave the market. Examples: There are no real world examples of perfectly competitive markets. The stock market comes close. 2.0 Analysis 2.1 Perfect competition Perfect competition describes a market structure whose assumptions are extremely strong and highly unlikely to exist in most real-time and real-world markets. The reality is that most markets are imperfectly competitive. Nonetheless, there is some value in understanding how price, output and equilibrium is established in both the short and the long run in a market that holds true...
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...unit. The second definition establishes that economics is at the core of what managers of these organizations do. This book presents economic concepts and principles from the perspective of “managerial economics,” which is a subfield of economics that places special emphasis on the choice aspect in the second definition. The purpose of managerial economics is to provide economic terminology and reasoning for the improvement of managerial decisions. Most readers will be familiar with two different conceptual approaches to the study of economics: microeconomics and macroeconomics. Microeconomics studies phenomena related to goods and services from the perspective of individual decisionmaking entities—that is, households and businesses. Macroeconomics approaches the same phenomena at an aggregate level, for example, the total consumption and production of a region. Microeconomics and macroeconomics each have their merits. The microeconomic approach is essential for understanding Attributed to Donald N. Stengal Saylor URL: http://www.saylor.org/books/ Saylor.org 2 the behavior of atomic entities in an economy....
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...------------------------------------------------- Top of Form Powered by JRank Bottom of Form Reference for Business Encyclopedia of Business, 2nd ed. Reference for Business » Encyclopedia of Business, 2nd ed. » Man-Mix » Managerial Economics MANAGERIAL ECONOMICS Ads by Google 1 year diploma courses - Info on Courses, Scholarships & Admissions from IDP Experts. -india.idp.com/18001022233 SWOT Analysis Tool - Get a free 30 day trial of Mindjet the leading Mindmapping Tool! -www.Mindjet.com online gcp courses - Online, Classroom & Blended Courses Certification Programs & More! -www.cfpie.com CAT Scholarships-T.I.M.E. - Must for all cat and mba aspirants Register Now-Upto 100% scholarships - www.time4education.com/ttse Photo by: nyul Ads by Google MBA - Supply Chain Mgmt. 100% Online backed by Textbooks Academic support,E-Library.Join Now utsglobal.edu.in Rapid eLearning Train your employees with Rapid eLearning, cut your business costs www.niidtech.com MBA Distance Education Online 1 Yr MBA @ 29000. Approved from AIMA India & IAD UK. Enrol Now www.iibmindia.in Papermaking Technology Download white papers on new papermaking machines and processes www.risiinfo.com/whitepapers Decisions made by managers are crucial to the success or failure of a business. Roles played by business managers are becoming increasingly more challenging as complexity in the business world grows. Business decisions are increasingly dependent...
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... Chapter 21 – Getting Employees to Work in the Firm’s Best Interests Chapter 22 – Getting Divisions to Work in the Firm’s Best Interests Chapter 23 – Managing Vertical Relationships Managerial Economics, 3rd Edition Luke M. Froeb; Brian T. McCann; Michael R. Ward; Mikhael Shor http://en.wikipedia.org/wiki/Managerial_economics / http://www.coursehero.com/sitemap/schools/501-FIT/courses/1467122-ECONBUS-5421/ http://www.coursehero.com/sitemap/states/Massachusetts/ Managerial economics is the "application of the economic concepts and economic analysis to the problems of formulating rational managerial decisions".[1]It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice.[2] It draws heavily from quantitative techniques such as regression analysis, correlation and calculus.[3] If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research, mathematical programming, game theory for strategic decisions,[4] and other computational methods.[5] Managerial decision areas include: • assessment of investible funds • selecting business area • choice of product • determining optimum output ...
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...functzon Example: Transformatzon functzon Example: Cobb-Douglas technology Example: Leontzef technology Activity analysis 5 Monotonic technologies 6 Convex technologies 7 Regular technologies 9 Parametric representations of technology 10 The technical rate of substitution 11 Example: T R S for a Cobb-Douglas technology The elasticity of substitution 13 Example: The elastzczty of substztutzon for the Cobb-Douglas productzon functzon Returns to scale 14 Example: Returns to scale and the Cobb-Douglas technology Homogeneous and homothetic technologies 17 Example: The CES productzon functzon Exercises 21 2 Profit Maximization . Profit maximization 25 Difficulties 28 Example: The profit functzon for Cobb-Douglas technology Properties of demand and supply functions 31 Comparative statics using the first-order conditions 32 Comparative statics using algebra 35 Recoverability 36 Exercises 39 VI CONTENTS 3 Profit Function Properties of the profit function 40 Example: The eflects of price stabilization Supply and demand functions from the profit function...
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