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Micro Economics
Micro Economics is the branch of Economics which analyses the market behavior of individual consumers and firms. It focuses on the patterns of supply and demand and price and output determination in the individual markets.
390 Questions
What is the positive impact of capitalism on a community?
Capitalism is an economic system which is driven by the investment of money, also known as capital, in business ventures. Businesses need capital. Without it, they cannot be created, or grow. And businesses are generally good for a community; they employ people, and they have products and services to sell, which members of the community may wish to buy. A great deal of our lives depends upon business.
What is deductive and indeductive method according to micro economics?
inductive is when you observe that something happen
How is macro and microeconomics interdependent?
Macroeconomics uses a microeconomic foundation to make it analysis. Microeconomic theory often uses econometric data taken from macroeconomics to come up with theories of economic relationships.
Discuss difference between micro and macro economics?
my name is nanik udassi ,well i am not interested in writing whole answer just search oth pages
but for simple as u all know micro is study od individual and small firm and the other now u can guess
my name is naik udassi ,i reside in India ,i don't care what answer u want ,u prepare it for urself by reading book as so i am doing My name is fahad islam and i am a student of Hailey college of commerce in Pakistan in micro economics we study as individual while in macro economics we study as huge level
How is an oligopoly different from monopoly?
- AR=MR
- normal profits in the long run
- large number of sellers
- free entry and excit ,as there are no barriers
- the seller is only the price taker
- perfectly elastic
- each firm is a part of the industry
Why economist use cardinal utility theory?
In economics, cardinal utility is a theory of utility under which the utility (roughly, satisfaction) gained from a particular good or service can be measured and that the magnitude of the measurement is meaningful. Under cardinal utility theory, the util is a unit of measurement much like the metre or second. A util has a fixed size, making comparisons based on ratios of utils possible.
This sort of comparison is of great theoretical value in social planning and ethics. Under the framework of utilitarianism, actions (including production of goods and provision of services) are judged by their contributions to overall happiness. Cardinal utility provides a way of judging the "greatest good to the greatest number". An act that reduces one person's utility by 75 utils while increasing two others' by 50 utils each has increased overall utility by 25 utils and is thus a positive contribution; one that costs the first person 125 utils while giving the same 50 each to two other people has resulted in a net loss of 25 utils.
This ability to neatly compare utilities in theory runs into problems in practice. There are major difficulties in measuring utility, which is inherently subjective. Unlike with distance or time, one cannot simply use a ruler or stopwatch to measure satisfaction. It is not simple to definitively say whether a good is worth 50, 75, or 125 utils to a person, or even if it is worth the same number of utils to two different people. These problems have resulted in a shift in microeconomic theory towards ranked preferences or ordinal utility, in which a good with a higher utility is preferred to one with lower utility but the magnitude of the difference has no meaning.
Cardinal utility was popular with utilitarian economists in the 18th century. Their belief was that utility could be measured and therefore wealth redistributed to those with lower levels of utility. Some utilitarians believed that since utility has diminishing marginal returns, it could be shaven off the top of an individual and given to another individual who would find the utility more useful. Many modern utilitarians, however, argue that such social engineering is impractical and is itself likely to reduce total utility.
There remain economists who believe that utility can be measured. These measures are not perfect but can act as a proxy for the utility. Lancaster's characteristics approach to consumer demand illustrates this point.
How much control does an oligopoly have over price?
faces a demand curve that is inelastic throughout the range of market demand.
faces a perfectly inelastic demand curve.
is a price maker.
is also able to dictate the quantity purchased
Define price expectation elasticity of demand?
Expectation elasticity of demand mean if in future the price will rise then in present the demand of that comm. will fall i.e elasticity will be +ve.. n vice versa..., RELATIONSHIP OF EXPECTION OF PRESE WITH THAT COMMODITY Expectations about future price rise or fall is directly related with present or a recent demand i.e if prise rise in future, the demand will rise 4 that comm. n vise versa....
What is the difference between price elasticity and cross elasticity of demand?
Cross price elasticity of demand measures how much demand of one good, say x changes when the price of another good, say y changes, holding everything else constant.
For example, you can measure what happens to the demand of bread when the price of milk changes.
The cross price elasticity is calculated as the percentage change in the quantity demanded of good x divided by the percentage change in the price of good y.
If the cross price elasticity is negative, then we call such goods Complements (example: pizza and soft drinks -- they are consumed together).
If the cross price elasticity is positive, then we call such goods Substitutes (example: pizza and burgers -- you usually consume either or).
The income elasticity of demand measures the change in the quantity demanded of some good, when the income changes, holding everything else constant.
For example you can measure what happens to the demand for expensive red wine when income increases.
The income elasticity is calculated as the percentage change in the quantity demanded of the good divided by the percentage change in income.
If the income elasticity for a good is positive we call them normal goods. It can be between 0 and 1, and we call it income inelastic demand for goods such as food, clothing, newspaper. If it is above 1, we call it income elastic demand. Examples are the red wine, cruises, jewelry, art, etc.
If the income elasticity is negative, this means that as income increases, the quantity demanded for those goods actually decreases, we call those goods inferior goods. Examples are "Ramen noodles", cheap red wine, potatoes, rice. etc.
cartels, monopolies, trust, and horizontal and vertical integration all share the goal of
What are the benefits in microeconomics?
Microeconomics focuses on the behavior of the individual's choice in allocating and dealing with scarcity, the major factor in economics. Small firms also belong to the individual group and thus are being studied by microeconomics.
What is the difference between mankiw's 4th and 5th edition of principles of microeconomics?
Virtually non-existent. They simply changed up the chapter order and switched around a few words. Learning from these two textbooks is the exact same thing.
They do this just so that they can put a new textbook on the market for students to buy.
How are the minimum wage and union wages similar and how are they different?
Very few union members work for minimum wage because they are skilled workers. Union members come together to demand wages that are higher than minimum wage because they offer experience and skills that the unskilled non-union members cannot. When the minimum wage increases by law, there is a smaller difference between the minimum wage and the union wage, and it becomes more beneficial for employers to hire skilled union members than unskilled workers at the minimum wage because the marginal benefit of the union members' skills is worth the marginal cost of the union wages.
What is product characteristics?
A product characteristic is an attribute or property of the product that describes the product's ability to satisfy its purpose in a larger system.
How do you find the Nash equilibrium?
Step by step guide on how to find a Nash Equilibrium or Equilibria
Step 1. Look at the payoff matrix and figure out whose payoff's are whose:
Step 2. Figure out Player A's best response to all of player B's actions
Step 3. Figure out Player B's best response to all of player A's actions
Step 4. A Nash equilibrium exists where Player B's best response is the same as Player
Is production a stock and income a flow?
yes, production is a stock concept and income is a flow concept.
when we start eating, the level of hunger is high. but eventually our capacity to eat falls, thus the marginal utility at the all - you- can eat restaurant will fall.
What is a good topic for an article summary in microeconomics?
A good topic for an article summary in microeconomics could be "The Impact of Price Elasticity on Consumer Behavior." This topic allows for an exploration of how changes in price affect demand for goods and services, highlighting concepts like substitutes and complements. It can also discuss real-world applications, such as pricing strategies for businesses and implications for government policy. Overall, it provides a practical lens through which to understand consumer choices and market dynamics.
