Assignment introduction to micro economics

The level of demand for a good or service is determined by several factors, including: the price of the good or service prices of other goods and services, especially substitutes and complements income tastes and preferences expectations. We all need necessities, such as basic foodstuffs, but other products may be highly sought after by some and regarded as worthless by others.

Introduction to economics lecture notes pdf

Such issues inflation, deflation, business cycles etc in the economic environment impact the decision making of the individual firms, industry, households etc. A change in price will cause a movement along the curve. No economy or economic system in the world has witnessed or experienced the full employment scenario till date. Economics really has changed my life and the whole way I see the world. If the price is set above the equilibrium price, this will result in the quantity supplied exceeding the quantity demanded. The limitations of Microeconomics are as follows: Microeconomic theory assumes full employment in an economy. How can one make best use of given resources while producing goods and services in order to maximize the efficiency of production and consumption or to maximize the returns for an individual firm, industry, household etc? The public was outraged, newspapers called for better conditions, the clergy appealed to the captains' sense of humanity, and British Parliament passed regulations requiring better treatment of these prisoners. The impact of intervention in the price system should not be seen as undesirable in all cases. It is intended to introduce key topics to those who have not studied microeconomics, and to offer a revision to those who have done so What is microeconomics? In other words, we can say that Macroeconomics is the study of economy or economic systems as a whole. For example while explaining the Law of Demand, which states that There is an inverse relationship between the price and the demand of a good or service.

Economics will help you with your choices, whether picking a career, parenting a child, or deciding how much education is a truly worthwhile investment.

Macroeconomic theory explains and deals with the economic environment which an individuals firms, industry, household etc face or encounter.

Introduction to microeconomics lecture notes ppt

In addition to price elasticity, there are similar concepts of relevance to your study: Income elasticity is the responsiveness of quantity demanded or supplied to a change in income. As these conditions imply, there are few if any examples of perfectly competitive markets in real life. What's so powerful about the discipline is just how much it shapes how you understand everything around you. Following the same rationale as applied earlier, a movement along the supply curve will be brought about by a change in price, but a movement of the whole curve will be caused by a determinant other than price. This is on account of the fall in the value of money and thus real income due to continous and persistent rise in prices In this case the resource allcation exercise which your mother undertakes is subject matter microeconomic theory while the problem of Inflation is part of study of Macroeconomic theory. How can one make best use of given resources while producing goods and services in order to maximize the efficiency of production and consumption or to maximize the returns for an individual firm, industry, household etc? One consequence of this is that there was excess demand in the system, and this led to an illegal market developing. You've already hit on a key economic insight, incentives.

The 'black market' price is OP2. One of the most famous of these is confirmed by the law of diminishing returns. However, when we look around us, we realize that all economic systems across the world including the capitalist economies experience government intervention into the economic systems on a very regular basis.

This will result in a situation in which the quantity demanded will exceed the quantity supplied, provided the maximum price is struck below the equilibrium price Figure 4. Even if an individual can produce all the food needed to survive, that person will still need clothes, shelter and other necessities.

For example, why is the service at a local restaurant typically so much better than from the cable company?

introduction to microeconomics lecture notes

Scope of Microeconomics Microeconomic theory deals with four important issues at an individual level.

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