ID: B Microeconomics Mid-term Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Figure 6-3 ____ ____ ____ ____ ____ 1. Refer to Figure 6-3. In panel (b), with the price floor in effect, there will be a. a shortage of wheat. b. equilibrium in the market. c. a surplus of wheat. d. an excess demand for wheat. 2. The positive relationship between price and quantity supplied is called a. profit. b. a change in supply. c. a shift
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efficiently. Importance of managerial economics Managerial Decision Problems Economic theory Microeconomics Macroeconomics Decision Sciences Mathematical Economics Econometrics MANAGERIAL ECONOMICS Application of economic theory and decision science tools to solve managerial decision problems OPTIMAL SOLUTIONS TO MANAGERIAL DECISION PROBLEMS Managerial Decision Problems Economic theory Microeconomics Macroeconomics Decision Sciences Mathematical Economics Econometrics MANAGERIAL ECONOMICS
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economic environment consists of External factors in a business' market and the broader economy that can influence a business. You can divide the economic environment into: • The microeconomic environment - which affects business decision making - such as individual actions of firms and consumers(Market size, Demand, Supply, Competitors, Suppliers and Distribution chain, such as retailer stores) • The macroeconomic environment - which affects an entire economy and all of its participants. Many economic
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unemployment, national income, growth rate, GDP, inflation and price level is called Macroeconomics.”(www.investopedia.com) As economics developed two distinct approaches were seen to immerge the Neo Classical which stated that Macroeconomics = ∑Microeconomics and the Keynesian which stated the opposite. Both these approaches are still followed in the managing of the present world Economies. Figure 1. As seen above, Neo classical approach lasted several years before the Great Depression, but was
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Easter eggs is established by bringing the concepts of both supply and demand together to see how the households differentiate in buying decisions and the selling of Easter eggs to achieve market equilibrium. Market equilibrium is the price at which the quantity supplied equals to the quantity demanded. In the hypothetical market model below, the equilibrium price meets at $3 and the quantity is 7,000 Easter eggs of the demand and supply curves. S4 S4 S2 S2 Copyright
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possibility curve concave ? (iii) State two characteristics of resources which give rise to an economic problem. (iv) Give two examples of microeconomic studies 2. Give meaning of (i) demand, (ii) normal good and (iii) inferior good. 3 3. Explain the effect of ‘input price changes’ on the supply of a good. 3 4. Explain the relation between marginal revenue and average revenue
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3 1. Production Possibility Frontier 4-6 2. Demand Curve 7-9 3. Marginal and Average Product 9-10 4. Law of Diminishing Return 10 5. Monopolistic
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Microeconomic issues: If the price of gas is $2.00 per liter, people may be willing and able to purchase 50 liters per week, on average. If the price drops to $1.75 per liter, they may be able to buy 60 liters. At $1.50 per liter, they may be prepared to purchase 75 liters. Note that while some gas usage is essential – driving to work, for example – some use is optional. Therefore, as gas prices drop, people may choose to make more optional trips during weekends, and so on. The resulting demand
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the law of supply and demand. I will then present the situations in which inefficient results are created and also areas in which Pareto efficiency is of particular significance. Generally, if the demand for a good increases its price will increase as supply becomes limited for consumers. This in turn acts as an incentive for producers to supply higher output and as supply increases the price will eventually go down and equilibrium will be achieved. This also works for the opposite as demand falls
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that varies the most. The Law of Supply states that if the demand of an item rises then the price of that item will also rise (Colander, 2013). Therefore, if the demand for sweeteners were to rise then the price of raw materials would also rise. This would increase the cost of manufacturing the soft drink. The cost of productivity and labor would rise if for some reason the demand for the coke product was to rise also. The reason for this is that to fulfill the rising demand, Coca-Cola would have to
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