There is little debate with concern with micro-economics. Nevertheless it is foundational to know this part of economics.
This is part 00
I will post lessons later on.
There is little debate with concern with micro-economics. Nevertheless it is foundational to know this part of economics.
This is part 00
I will post lessons later on.
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
--Theodore Roosevelt
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
-- Mark Twain
"Man who stand on hill with mouth open will wait long time for roast duck to drop in."
-- Confucius
Lol. No thank you. Most microeconomics is common sense, complicated by a large amount of equations.
Last edited by FDG; 07-02-2010 at 06:58 AM.
Obsequium amicos, veritas odium parit
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
--Theodore Roosevelt
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
-- Mark Twain
"Man who stand on hill with mouth open will wait long time for roast duck to drop in."
-- Confucius
Microeconomics lessons
Part 1 section 1 subsection 1
-prices determine allocations
Law of Demand: Consumers demand more of a good the lower the price, holding everything else constant.
The law of demand is considered the most empirical finding in economics.
Demand curves generally slope downward. A mathematical relationship can be shown in a demand function.
It can be shown like this:
Q=D(abc,Y)
Whereas abc is the variants determining demand, Y is income, Q is quantity, and D is demand.
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
--Theodore Roosevelt
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
-- Mark Twain
"Man who stand on hill with mouth open will wait long time for roast duck to drop in."
-- Confucius
And, by consequence, consumers demand less of a good the higher the price.
Part 1 section 1 subsection 2
The supply curve generally slopes upward.
Mathematically the supply curve can be expressed like this:
Q=S(Sa, Sb)
Where as Q is quantity, S is supply, and Sa and Sb are variants (such as prices) determining supply.
Subsection 3
Market equilibrium is a situation where no consumer wants to change his or her behavior.
We can use algebra to determine equilibrium. Once the determents of the supply equation and demand equation are broken down, we set both of them equal to get the equilibrium point. So:
Supply equation:
Q=S(Sa, Sb)
Q=178+40P-60Ph
If Ph represents a price of a substitute, say, $1.50, then we get:
Q=88+40P
Demand equation:
Q=D(abc,Y)
With prices algebraically factored:
Q=286-20P
To find equilibrium, we set the demand and supply equations equal:
286-(20P)=88+(40P)
If the price is $3.30, then our equilibrium quantity is 220.
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
--Theodore Roosevelt
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
-- Mark Twain
"Man who stand on hill with mouth open will wait long time for roast duck to drop in."
-- Confucius