...In a market which works properly, the unit which is most cost-competitive will produce as much as it can in the limit of its capacity and if the capacity is lower than total demand on the market. The second most cost-competitive unit will do the same so long as the addition of its capacity and the first unit’s capacity isn’t sufficient to meet total demand. This will continue until total demand is satisfied. The units whose production costs are higher and which are not needed to meet total demand will either be idle or shut down (or not built if they don’t exist). Take the instance of the paper industry. We assume total demand for paper will be equal to 75,000 tonnes. There are three firms interested by this market: Alpha, Bravo and Romeo. Each one has production units whose costs per tweety and whose capacity are illustrated in the table below. Firm Production Unit Cost per tonne Capacity Alpha Alpha 1 700 40,000 Alpha 2 850 25,000 Bravo Bravo 1 750 25,000 Bravo 2 1200 100,000 Romeo Romeo 1 1000 10,000 1. Which units will produce in this market? Be precise and illustrate with a drawing. 2. What will be the market price for the tonne of paper? Show graphically the profits that each unit (Alpha 1, Alpha 2, Bravo 1, ...) will be making. 3. Bravo is wondering if it should increase the capacity of Bravo 1. What would be the consequences of such a decision? Illustrate this with a new drawing. 4. Alpha is reconsidering its position on the market and its...
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...ECON 545: Business Economics Project Two: Microeconomic Analysis Situation B For Situation B, Cindy is looking at investing into the renewable energy industry. She is looking at one section of the industry to invest in, which is that of contracting the installation of solar panels. Cindy, has read, that families and businesses are saving money by going to solar for their power needed. Also, that there are government back regulation to make solar more assessable to people. For Cindy, she is looking pass the business opportunity for installing solar planes, but that this product can reduce pollution and help save the environment. GDP and Solar Energy In the United States and most nations in the world, energy is vital in keeping society stable and expanding. Energy provides the ability to aid in transportation, activities in daily living and employment. In the United States, $1.2 trillion dollars were spent on energy in 2013 or 8.3% of the GDP. That translates into an annual cost of 3,895 dollars per person was spend on energy consumption. With the great environmental impact seen by the production of energy, there was been more of a call, for renewable energy forms, as that of solar panels. The United States dose consumes 19% of the world’s energy supply and a 19% total of the world’s GPD. With the large needed for energy, companies are looking for new way to produce this produce that cost less and reduces the environmental impact. Renewable energy consumption is projected...
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...Considering the elements of microeconomics, create a list of three (3) best practices that would benefit any small business or start-up. Explain your rationale. Answer: Microeconomic show how new businesses have determined the competitively successful or unsuccessful pricing of their goods and services based on the mass consumer needs and choices, market competition and other financial and economic formulas. Microeconomics also studies supply-demand ratios and its effect on consumer spending and business decision-making Supply and Demand Think of demand as marketing, and supply as production. It is the job of marketing to create demand from their practices and programs. Marketing must produce advertisement campaigns, sales initiatives and motivation for the sales force to excel. Typically we think of demand just being what the consumer wants, but demand in today’s economy can be somewhat created my marketing efforts. Location of your place of business is important for the operation of your business, whether you will have a home office, a shared or private office space, or a retail location. Coming from a Real Estate background it is about Location..Location…Location!!! Think about your location, equipment, and overall setup, and make sure your business location works for the type of business you will be doing and that the demographics are suitable for your market and product. Research your competition so that you have detailed information about your potential consumers...
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...BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions" BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN 7206X "Microeconomics for Business Decisions"BUSN...
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...Microeconomics and the Laws of Supply and Demand Nicholas Perry ECO/365 May 26, 2014 Tarron Khemraj Microeconomics and the Laws of Supply and Demand In the Supply and Demand Concept Simulator, there were several microeconomic and macroeconomic principles covered. Also, there were shifts in the supply or demand curve throughout the simulator, and I will explain the shifts in greater detail. To understand what microeconomic principles were used in the simulator, understanding what microeconomics means is important. Microeconomics is the study or analysis of the economy or market on an individual or business level. It focuses on individual buyers and sellers within businesses. One example from the simulator of microeconomics is when Susan asked me to decrease the vacancy rate to 15 percent. In order to do this, I must decrease the cost of the apartments to try and increase the demand or interest in vacant apartments. The reason this is microeconomics is because the decision a decision made on an individual level and has to do with the buyer and seller only to benefit my business. Susan later asked me to lease out all 2,500 available two-bedroom apartments available. In order to do this, Hal suggest we raise the monthly rental cost for the two bedroom apartments so we can cover the maintenance cost. We have to do this in order to stay profitable. This is microeconomics because again, it is focused around the buyer (renters) and the seller (GoodLife Management). The...
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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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...an inquiry into the nature and causes of wealth of the nation. Later on J.S Mill defined economics as the practical science of production and distribution of wealth. Davenport defined economics as the practical science that treats phenomena from the stand point of price. Prof. pigou in his own definition describes the subject as having a lot to do with welfare while Alfred marshal defined economics as a study of mankind in the ordinary business life. Lord Lionel C. Robbins defined economics as ‘the science which studies human behaviors as a relationship between ends and scarce means which have alternative uses’. It can therefore be safely said that economic is the study of production, distribution, exchange and consumption of goods. And is the study of how society decides what, how and for whom to produce. Economic is divided into two main branches: microeconomic and macroeconomic. MICROECONOMIC Microeconomics deals with the behavior of individuals economic units. These units include consumers, workers, investors, owners of land, business firm:- in fact, any individual or entity that...
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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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...Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct? A) By and large, managerial decisions are not affected by either microeconomic or macroeconomic forces. B) Managerial decisions are affected primarily by macroeconomic forces. C) Managerial decisions are affected by both microeconomic and macroeconomic forces. D) Managerial decisions are affected primarily by microeconomic forces. 1) 2) Walmartʹs decision in 1994 to continue operating stores in specific cities in Mexico when other firms were pulling out would be best classified as: A) a microeconomic decision. B) a macroeconomic decision. C) both a microeconomic and a macroeconomic decision. D) neither a microeconomic nor a macroeconomic decision. 2) 3) Which of the following would be considered an example of a macroeconomic problem? A) Should Microsoft reduce the price of its Windows operating system? B) Should JP Morgan Chase increase the interest rate it charges its credit card customers? C) Should Mitsubishi eliminate one of its production shifts? D) Should the federal government extend the eligibility period for unemployment benefits? 3) 4) Walmartʹs entry into the market in Mexico had the effect of: A) reducing competition and raising the prices of many of the goods it sells. B) increasing competition and raising the prices of many of the goods it sells...
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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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...Differentiate between Microeconomics and Macroeconomics Name Institution Differentiate between Microeconomics and Macroeconomics According to (Krugman, 2005), Microeconomics involves analysis of individual economic units such as households, demand, and supply and market equilibrium. Macroeconomics, on the other hand, includes analysis of aggregate economic variables such as national income, inflation, unemployment and interest rates. My primary objective in this paper, therefore, is to differentiate between macroeconomics and microeconomics. This fact alone cannot distinguish macro and microeconomics. Nevertheless, microeconomics and macroeconomics are interdependent. While analyzing macroeconomics an economist has to ask questions which affect the standards of living of an entire country. Such issues will be related to inflation, unemployment, national income, product markets, fiscal policies, international trade, economic growth and interest rates (Mankiw, 2007). On the other hand, an economist while analyzing Microeconomics will look at individual’s purchasing power, demand, supply, income, utility level, labor markets, production, consumption and opportunity cost. Macroeconomics is concerned with the national income and the gross domestic product while Microeconomics is concerned with the impact of an increase or decrease in a single economic variable (Krugman, 2005). Microeconomics works on the principle that prices of goods and services are determined by the...
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...Macroeconomic and Microeconomic environment Macroeconomics looks at aspects of economies as a whole instead of the individual markets, basically a study looking at the bigger picture of the economy. Offering a broader focus is probably the most important difference between microeconomics and macroeconomics. This branch of economics is one of the two most general fields, particularly looking at the structure, behaviour, decision-making and performance of national, regional and global economies. Through the study of aggregated indicators, macroeconomists understand the functioning of whole economies. By using GOP, unemployment rates and price indices an explanation can be made in regards to the relationships between national income, current unemployment levels, changes in employment, pricing levels, inflation, savings, investment, international trade and the rate of growth. Even though there is a broad field of study where macroeconomics is concerned, two areas of research are of utmost importance: * Understanding the causes and consequences of the business cycle, which include fluctuations in trade, economic activity and trade during periods of rapid economic growth and periods of decline. * Understanding the demands of a particular product, service or commodity during a long period of time in which national income increases. Macroeconomics enables large corporations and governments to analyse variables and behaviour's to find answers to questions such as...
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...Simulation Angela Moore ECO/365 May 19, 2014 The examination will distinguish two microeconomics and two macroeconomics standards or ideas from the recreation, and demonstrate why every guideline or idea is in the class of macroeconomics or microeconomics. The examination will distinguish no less than one movement of the supply bend, and one movement of the demand bend from the reproduction and what causes the movements. The investigation will demonstrate for each one movement, how it might influence the balance price, quantity, and choice making. It will detail provision to take in material about supply and demand from the reenactment to working environment or true product. It will detail how ideas of microeconomics help understand the variables that influence moves in supply and demand on the balance price and quantity, and it will additionally detail how ideas of macroeconomics help understand the components that influence moves in supply and demand on the equilibrium price and quantity. The investigation will demonstrate how the price flexibility of demand influences a firm’s pricing strategy in relation to the simulation. Microeconomic theory recognizes economic reasoning from the perspective of people and firms and develops to an examination of the entire economy. Microeconomics is the investigation of one's decision, and how that decision is impacted by economic forces. Microeconomics studies such things as the evaluating strategies of firms, family units' choices on...
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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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...Microeconomics and the law of demand Eco/365 07/30/2015 Mark Wiese Microeconomics and the law of demand Understanding how the economy works is important for those who plan to be business majors. It is just as important for those planning on go into business for themselves or seeking management positions at a large company. In this writing there will be brief explanations on how the economy works related to it’s key concepts. Concepts such as microeconomic, macroeconomics, supply curve, and demand curve will be discussed. Even if the common person is not planning on going into business or holding a managing position having an understanding on how the economy works as a whole would aid them in their decision on the way their money is spent. Economics is the study of human and how people coordinate there wants and desires into a system. This is a system where goods and services can be purchased in accordance with government rules and regulations. It is said by Adam Smith, “that when individuals seek to operate a business that provides a service it helps the overall society”. This statement is a mixture of both microeconomics and macroeconomics (colander,2015). The whole economic system can be broken down into to groups that can be mastered equally. The name of theses to subordinate forms of economics is called microeconomics and macroeconomics. Often these two concepts are study separately as schools of thought but they both are dependent up on each other (Colander,...
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