What is Micro Economics?

Size: px
Start display at page:

Download "What is Micro Economics?"

Transcription

1

2 What is Micro Economics? 2

3 Micro Economics A.K.A Price Theory/Partial Analysis MIKRO means Small Study of individual units of the economy Explains price determination in both commodity and factor market Based on price mechanism which depends on demand and supply 3

4

5 Important questions studied in microeconomics

6 1. What is the level of total output in the economy? 2. How is the total output determined? 3. How does the total output grow over time? 4. Are the resources of the economy (eg labour) fully employed? 5. What are the reasons behind the unemployment of resources? 6. Why do prices rise?

7 Table of Contents W.R.T NCERT-XII

8 TOPICS 1. INTRODUCTION 2. THEORY OF CONSUMER BEHAVIOUR 3. PRODUCTION AND COSTS 4. THEORY OF FIRM UNDER PERFECT COMPETITION 5. MARKET EQUILIBRIUM 6. NON-COMPETITIVE MARKETS

9 1. INTRODUCTION 1.1 A Simple Economy 1.2 Central Problems of an Economy 1.3 Organisation of Economic Activities The Centrally Planned Economy The Market Economy 1.4 Positive and Normative Economics 1.5 Microeconomics and Macroeconomics

10 2. THEORY OF CONSUMER BEHAVIOUR 2.1 The Consumer s Budget Budget Set Budget Line Changes in the Budget Set 2.2 Preferences of the Consumer Monotonic Preferences Substitution between Goods Diminishing Rate of Substitution Indifference Curve Shape of the Indifference Curve Indifference Map Utility 2.3 Optimal Choice of the Consumer 2.4 Demand Demand Curve and the Law of Demand Normal and Inferior Goods Substitutes and Complements Shifts in the Demand Curve Movements along the Demand Curve and Shifts in the Demand Curve 2.5 Market Demand 2.6 Elasticity of Demand Elasticity along a Linear Demand Curve Factors Determining Price Elasticity of Demand for a Good Elasticity and Expenditure

11 3. PRODUCTION AND COSTS 3.1 Production Function 3.2 The Short Run and the Long Run 3.3 Total Product, Average Product and Marginal Product Total Product Average Product Marginal Product 3.4 The Law of Diminishing Marginal Product and the Law of Variable Proportions 3.5 Shapes of Total Product, Marginal Product and Average Product Curves 3.6 Returns to Scale 3.7 Costs Short Run Costs Long Run Costs

12 4. THE THEORY OF THE FIRM UNDER PERFECT COMPETITION 4.1 Perfect competition: Defining Features 4.2 Revenue 4.3 Profit Maximisation Condition Condition Condition The Profit Maximisation Problem: Graphical Representation 4.4 Supply Curve of a Firm Short Run Supply Curve of a Firm Long Run Supply Curve of a Firm The Shut Down Point The Normal Profit and Break-even Point 4.5 Determinants of a Firm s Supply Curve Technological Progress Input Prices Unit Tax 4.6 Market Supply Curve 4.7 Price Elasticity of Supply The Geometric Method

13 5. MARKET EQUILIBRIUM 5.1 Equilibrium, Excess Demand, Excess Supply Market Equilibrium-Fixed Number Firms Market Equilibrium: Free Entry & Exit 5.2 Applications Price Ceiling Price Floor

14 6. NON-COMPETITIVE MARKETS 6.1 Simple Monopoly in the Commodity Market Market Demand Curve is the A.R Curve Total, Average and Marginal Revenues Marginal Revenue and Price Elasticity of Demand Short Run Equilibrium of the Monopoly Firm 6.2 Other Non-perfectly Competitive Markets Monopolistic Competition How do Firms behave in Oligopoly

15 PRODUCTION

16 Production Product Goods Services Free Goods Economic Goods goods Consumer Goods Capital Goods Intermediary Goods Perishable Goods Durable Goods Single Use C.G Durable Use C.G The Output of an economy is called PRODUCT Raw Materials Intermediate goods Final Goods

17 Rent + Wages + Interest + Profit = Factor Cost (10) Factor Cost (10)+ Taxes(2) = MRP(12) Anything sold below the factor cost is Subsidy Factor Cost (10) = Actual Cost (8)+ Subsidy(2) Net Taxes = Taxes Subsidy (Taxes > Subsidy) Factor Cost + Net Taxes = MRP Value = price quantity

18 Factors of Production Land Labour Capital Entrepreneur Factor Payments Rent Wages Interest Profit

19 Based on Ownership of F.O.P

20 (A) Capitalist Economy The capitalist or free enterprise economy is the oldest form of economy. Earlier economists supported the policy of laissez fair meaning leave free. They advocated minimum government intervention in the economic activities. The following are the main features of a capitalist economy; Free enterprise Private property Freedom of Contract Profit Motive Competition Consumer s Sovereignty

21 Capitalist Economy

22 Capitalist Economy Pros Production of cheap and better products Reward Innovation Competition Efficiency Cons Inequalities of Income Labour Exploitation Inefficient distribution of fruits

23 (B) Socialist Economy In the socialist or centrally planned economies all the productive resources are owned and controlled by the government in the overall interest of the society. The socialist economy has the following main features Collective Ownership of means of Production Social Welfare Objective Central Planning Reduction in Inequalities No class conflict

24 (C) Mixed Economy A mixed economy combines the best features of capitalism and socialism. Thus mixed economy has some elements of both free enterprise or capitalist economy as well as a government controlled socialist economy. The public and private sectors co-exist in mixed economies. The main characteristics of a mixed economy are as follows: Co-existence of public and private sectors. Individual Freedom Economic Planning Price Mechanism

25 Market Place where buyer & Seller meets. Edwards defined Market as a mechanism by which buyer and sellers are brought together.

26

27

28 Cost & Price?

29 Cost & Price The cost is the amount spent by a business making the product. The price is the amount customers pay for a product.

30

31

32

33

34

35

36 What is Profit/Gain? (Revenue Cost) What is Loss? (Cost- Revenue)

37

38 P.P.C?

39 Production Possibilities Curve (PPC): The Production Possibilities Curve (PPC) or transformative curve is a graph that shows the different rates of production of two goods that an individual of group can efficiently produce with limited resources.

40

41 BENEFITS OF P.P.C SCARCITY TRADE-OFFS OPPORTUNITY COST EFFICIENCY

42 HERO OF MARKET ECONOMY

43 HERO OF TOLLYWOOD

44 DEMAND AND SUPPLY

45 DEMAND LAW OF DEMAND REASONS FOR CHANGES IN DEMAND DECREASE IN DEMAND INCREASE IN DEMAND DETERMINERS OF DEMAND SHIFT DEMAND vs DEMAND QUANTITY

46

47

48 REASONS SUBSTITUTION EFFECT INCOME EFFECT LAW OF DIMINISHING MARGINAL UTILITY

49 DECREASE IN DEMAND

50 INCREASE IN DEMAND

51 DETERMINERS OF DEMAND SHIFT TASTE OR PREFERENCES NUMBER OF CONSUMERS PRICE OF RELATED GOODS SUBSTITUE GOODS COMPLIMENT GOODS INCOME NORMAL GOODS INFERIOR GOODS EXPECTATIONS

52

53 SUPPLY LAW OF SUPPLY DECREASE IN SUPPLY INCREASE IN SUPPLY DETERMINERS OF SUPPLY SHIFT

54

55 SUPPLY GRAPH

56 INCREASE IN SUPPLY

57 DECREASE IN SUPPLY

58 DETERMINERS OF SUPPLY SHIFT PRICE OF RESOURCES NUMBER OF PRODUCERS CHANGE IN TECHNOLOGY TAXES AND SUBSIDIES EXPECTATIONS

59 Equilibrium Price

60

61

62 Elasticity and the Total Revenue

63 Elasticity is used to determine how changes in product demand and supply relate to changes in consumer income or the producer's price.

64 The elastic product means that any change in price can result in changes in supply or demand. The inelastic product means that changes in price do not affect to a noticeable degree the supply or demand.

65

66

67

68

69 What is Contract Theory? Oliver Hart from Harvard and MIT professor Bengt Holmstrom won this year's Nobel Memorial Prize in Economics for their study of contracts and human behaviour in business. What is Contract Theory? How contracts are designed defines our incentives in various situations in the real world. Contracts can be o formal or informal, depending on whether they are enforced by law or social norms o complete or incomplete, which is based on whether they take into account all possibilities that lay in the future Contract theory is, partly at least, an attempt to understand the nuances in our contracts and how those contracts could be better constructed. The two economists provided "a comprehensive framework for analysing many diverse issues in contractual design, like performance-based pay for top executives, deductibles and co-pays in insurance, and the privatisation of public-sector activities. It has become especially relevant in the years after the 2008 financial crisis, which was blamed on the short-term risk encouraged by huge cash bonuses paid to investment bankers. It also touches on themes of moral hazard, which arises where those that take the risks don't share in the costs of failure.

70 QUIZ

71 1. In Duopoly, there is/are A. Many firms B. Two firms controlling the Market C. Large corporations D. None of the above

72 2. Model of Monopolistic Competition (i.e Imperfect competition) is characterized by A. Homogeneous goods B. Differentiated goods C. Substitute Goods D. All of the above

73 3. Price discrimination is a situation when a producer A. charges different prices in different markets B. charges same price C. Charges many prices D. All of the above.

74 4. Monopoly is a form of market where there is A. large number of buyer B. Small number of buyer C. A single firm controlling the market D. Any of the above

75 5. Shape of Total Fixed Cost(TFC) Curve is A. Verticle B. Horizontal C. 45 degree line D. None of the above

76 6. Production Functions Shows A. Prices of input and output B. Relationship between output and input C. various combinations of inputs D. All of the above

77 7. Law of Demand states that A. with the increase in price, Quantity increases B. with the increase in price, quantity decreases other things remaining the same. C. quantity does not change with any increase in price. D. All of the above.

78 8. What Microeconomics is about? A. Study of Business Environment B. Study of financial position of the economy C. Study of the Economy at Micro Level D. None of the above

79 9. While in Perfect Competition A. Firms are price taker B. Buyers are independent C. Input prices are given D. None of the above

BUSINESS ECONOMICS (PAPER IV-PART I)

BUSINESS ECONOMICS (PAPER IV-PART I) BUSINESS ECONOMICS (PAPER IV-PART I) (60 MARKS) Q1: Macroeconomics is also called economics (a) applied (b) aggregate (c) experimental (d) none Q2: A Study of how increase in the corporate income tax rate

More information

GACE Economics Assessment Test I (038) Curriculum Crosswalk

GACE Economics Assessment Test I (038) Curriculum Crosswalk Subarea I. Fundamental Economic Concepts (20%) Objective 1: Demonstrates an understanding of the fundamental concepts of economics A. Understands the concepts of scarcity, choice, and opportunity cost

More information

AP Microeconomics Review With Answers

AP Microeconomics Review With Answers AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show

More information

Microeconomics: MIE1102

Microeconomics: MIE1102 TEXT CHAPTERS TOPICS 1, 2 ECONOMICS, ECONOMIC SYSTEMS, MARKET ECONOMY 3 DEMAND AND SUPPLY. MARKET EQUILIBRIUM 4 ELASTICITY OF DEMAND AND SUPPLY 5 DEMAND & CONSUMER BEHAVIOR 6 PRODUCTION FUNCTION 7 COSTS

More information

Eco402 - Microeconomics Glossary By

Eco402 - Microeconomics Glossary By Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no

More information

ECONOMIC ANALYSIS PART-A

ECONOMIC ANALYSIS PART-A ECONOMIC ANALYSIS TWO MARK QUESTIONS: PART-A 1. State Alfred Marshall s definition of economics? Alfred Marshall defines economics as, A study of mankind in the ordinary business of life. An altered form

More information

Microeconomics. Use the graph below to answer question number 3

Microeconomics. Use the graph below to answer question number 3 More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *

More information

Microeconomics. Use the graph below to answer question number 3

Microeconomics. Use the graph below to answer question number 3 More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *

More information

Chapter 1- Introduction

Chapter 1- Introduction Chapter 1- Introduction A SIMPLE ECONOMY Central PROBLEMS OF AN ECONOMY: scarcity of resources problem of choice Every society has to decide on how to use its scarce resources. Production, exchange and

More information

1.3. Levels and Rates of Change Levels: example, wages and income versus Rates: example, inflation and growth Example: Box 1.3

1.3. Levels and Rates of Change Levels: example, wages and income versus Rates: example, inflation and growth Example: Box 1.3 1 Chapter 1 1.1. Scarcity, Choice, Opportunity Cost Definition of Economics: Resources versus Wants Wants: more and better unlimited Versus Needs: essential limited Versus Demand: ability to pay + want

More information

Microeconomics Exam Notes

Microeconomics Exam Notes Microeconomics Exam Notes Opportunity Cost What you give up to get it Production Possibility Frontier Maximum attainable combination of two products (Concept of Opportunity Cost). Main Decision Makers:

More information

MICRO EXAM REVIEW SHEET

MICRO EXAM REVIEW SHEET MICRO EXAM REVIEW SHEET 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry 3. Natural Monopoly with Fair-Return

More information

Name Date Period -Econ Unit 2: Chapter 4-7- Demand, Supply, Prices and Markets

Name Date Period -Econ Unit 2: Chapter 4-7- Demand, Supply, Prices and Markets / 88 Packet /20 Notes Unit 2 BIG PICTURE Questions /12 Name Date Period -Econ Unit 2: Chapter 4-7- Demand, Supply, Prices and Markets /108 Total Packet What is BIG PICTURE for Unit 2? To find the answer,

More information

Micro Economics Review

Micro Economics Review Micro Economics Review 1. Intro to Economics a. What is Economics? i. Scarcity and the factors of production 1. Explain why scarcity and choice are basic problems of economics 2. Identify the factors of

More information

AP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology

AP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology St. Michael Albertville High School Teacher: Matthew Rooker AP Microeconomics October 2014 Content Skills Learning Targets Assessment Resources & Technology November 2014 Content Skills Learning Targets

More information

Question # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income: Will be risk averse. Will be risk neutral. Will be risk loving. Cannot decide without

More information

full revision of micro economics

full revision of micro economics www.examhelplogger.com full revision of micro economics JOIN CLASS 12 TH FREE BATCH ON WHATS APP M 98 91 291 604 MICRO ECONOMICS Studies The Behaviour Of An Individual Economic Unit. Example : Demand Of

More information

To produce more beach balls, you must give up ever increasing quantities of ice cream cones.

To produce more beach balls, you must give up ever increasing quantities of ice cream cones. Unit 01: Basic Concepts (Macro/Micro) Scarcity The Economic Problem: Unlimited wants, limited economic resources Factors of Production: -Land -Labor -Capital -Entrepreneurship Big 3 Questions: -What to

More information

Essential Questions Content Skills Assessments Standards/PIs Resources/Notes. Discriminates between scarcity and shortage.

Essential Questions Content Skills Assessments Standards/PIs Resources/Notes. Discriminates between scarcity and shortage. Map: AP Economics Type: Consensus Grade Level: 12 School Year: 2010-2011 Author: Jessica Cartusciello District/Building: Island Trees/Island Trees High School Created: 06/28/2010 Last Updated: 07/22/2010

More information

GACE Economics Assessment Test at a Glance

GACE Economics Assessment Test at a Glance GACE Economics Assessment Test at a Glance Updated June 2017 See the GACE Economics Assessment Study Companion for practice questions and preparation resources. Assessment Name Economics Grade Level 6

More information

Postgraduate Diploma in Marketing December 2017 Examination Economic and Legal Impact (Econ)

Postgraduate Diploma in Marketing December 2017 Examination Economic and Legal Impact (Econ) Postgraduate Diploma in Marketing December 2017 Examination Economic and Legal Impact (Econ) Date: 20 December 2017 Time: 0830 Hrs 1130 Hrs Duration: Three (03) Hrs ) Total marks for this paper is 100

More information

Contents. Introduction

Contents. Introduction Contents Chapter 1 Introduction Introduction to Economics... 1 Meaning of Economics... 1 Definitions of Economics... 2 Introduction to Economic Theory... 3 The Structure of Theories... 5 Importance of

More information

Week One What is economics? Chapter 1

Week One What is economics? Chapter 1 Week One What is economics? Chapter 1 Economics: is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives

More information

FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

More information

The following key should help you understand the different types of activities students engage in during the course:

The following key should help you understand the different types of activities students engage in during the course: AP Microeconomics Course Overview Name Description AP Microeconomics AP Microeconomics studies the behavior of individuals and businesses as they exchange goods and services in the marketplace. Students

More information

Managerial Economics, 01/12/2003. A Glossary of Terms

Managerial Economics, 01/12/2003. A Glossary of Terms A Glossary of Terms The Digital Economist -A- Abundance--A physical or economic condition where the quantity available of a resource exceeds the quantity desired in the absence of a rationing system. Arbitrage

More information

Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics

Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics Annual Examination 1997 Time allowed: 3 hours Marks: 100 Maximum 1) Attempt any five questions. 2) All questions

More information

Micro Semester Review Name:

Micro Semester Review Name: Micro Semester Review Name: The following review is set up to emphasize certain concepts, graphs and terms. It is the responsibility of the individual teachers to emphasize and review the analysis aspects

More information

+ What is Economics? societies use scarce resources to produce valuable commodities and distribute them among different people

+ What is Economics? societies use scarce resources to produce valuable commodities and distribute them among different people ECONOMICS The word economy comes from a Greek word oikonomia for one who manages a household. is the study of how society manages its scarce resources. Traditionally land, labor, and capital resources

More information

NB: STUDENTS ARE REQUESTED IN THEIR OWN INTEREST TO WRITE LEGIBLY AND IN INK.

NB: STUDENTS ARE REQUESTED IN THEIR OWN INTEREST TO WRITE LEGIBLY AND IN INK. 1 INFORMATION & INSTRUCTIONS: DURATION: THREE (3) HOURS TOTAL MARKS: 300 INTERNAL EXAMINER : PROFESSOR D. MAHADEA EXTERNAL EXAMINER: MR R. SIMSON NB: STUDENTS ARE REQUESTED IN THEIR OWN INTEREST TO WRITE

More information

Market structures Perfect competition

Market structures Perfect competition Market structures Perfect competition Market Structures Market structure refers to the number and size of buyers and sellers in the market for a good or service. A market can be defined as a group of firms

More information

4. A situation in which the number of competing firms is relatively small is known as A. Monopoly B. Oligopoly C. Monopsony D. Perfect competition

4. A situation in which the number of competing firms is relatively small is known as A. Monopoly B. Oligopoly C. Monopsony D. Perfect competition 1. Demand is a function of A. Firm B. Cost C. Price D. Product 2. The kinked demand curve explains A. Demand flexibility B. Demand rigidity C. Price flexibility D. Price rigidity 3. Imperfect competition

More information

Perfect competition: occurs when none of the individual market participants (ie buyers or sellers) can influence the price of the product.

Perfect competition: occurs when none of the individual market participants (ie buyers or sellers) can influence the price of the product. Perfect Competition In this section of work and the next one we derive the equilibrium positions of firms in order to determine whether or not it is profitable for a firm to produce and, if so, what quantities

More information

CBSE Class XII Economics Delhi Board Paper Set Time: 3 hrs Max. Marks: 100

CBSE Class XII Economics Delhi Board Paper Set Time: 3 hrs Max. Marks: 100 CBSE Class XII Economics Delhi Board Paper Set 1 2017 Time: 3 hrs Max. Marks: 100 Note: Please check that this question paper contains 12 printed pages. Code number given on the right hand side of the

More information

6) The mailing must be postmarked by June 15. 7) If you have any questions please me at

6) The mailing must be postmarked by June 15. 7) If you have any questions please  me at Examination Instructions: 1) Answer the examination only after you have read the honesty pledge below. 2) The multiple choice section will be taken in WebCT and a tutorial for using WebCT is to be found

More information

UNIT 1 INTRODUCTION. Q. 1 PPC is concave because of: A. Law of diminishing returns. B. Law of DMU. C. Both D. None

UNIT 1 INTRODUCTION. Q. 1 PPC is concave because of: A. Law of diminishing returns. B. Law of DMU. C. Both D. None UNIT 1 INTRODUCTION Q. 1 PPC is concave because of: A. Law of diminishing returns. B. Law of DMU C. Both D. None Q2. PPC is downward sloping because of: a) MRT is diminishing b) Constant MRT c) Increasing

More information

Econ 300: Intermediate Microeconomics, Spring 2014 Final Exam Study Guide 1

Econ 300: Intermediate Microeconomics, Spring 2014 Final Exam Study Guide 1 Econ 300: Intermediate Microeconomics, Spring 2014 Final Exam Study Guide 1 Chronological order of topics covered in class (to the best of my memory). Introduction to Microeconomics (Chapter 1) What is

More information

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description:

24TECO 202 COURSE OUTLINE. Prerequisites: None. Course Description: Lecture 24TECO 202 24TPrinciples of Microeconomics COURSE OUTLINE Revised: Fall 2015 Prerequisites: None Course Description: Introduces the basic concepts of microeconomics. Explores the free market concepts

More information

SHORT QUESTIONS AND ANSWERS FOR ECO402

SHORT QUESTIONS AND ANSWERS FOR ECO402 SHORT QUESTIONS AND ANSWERS FOR ECO402 Question: How does opportunity cost relate to problem of scarcity? Answer: The problem of scarcity exists because of limited production. Thus, each society must make

More information

Question Paper Business Economics I (MB1B3): January 2009

Question Paper Business Economics I (MB1B3): January 2009 Question Paper Business Economics I (MB1B3): January 2009 Answer all 78 questions. Marks are indicated against each question. 1. Which of the following is not responsible for an increase in demand for

More information

ECONOMICS STUDY TEXT

ECONOMICS STUDY TEXT ECONOMICS STUDY TEXT www.naarocom.com Page 1 GENERAL OBJECTIVES This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply the fundamental principles

More information

Unit 2 Supply and Demand

Unit 2 Supply and Demand Unit 2 Supply and Demand Microeconomics - analyzes the Small Unit economic behavior of Individuals, Households and Firms to understand their decision-making process. -America s Free Enterprise- An economy

More information

Unit 1: Introduction to Economics

Unit 1: Introduction to Economics Microeconomics Syllabus AP Economics Textbooks & Resources: McConnell, Campbell & Stanley Brue. Economics: Principles, Problems, and Policies. 16 th ed., New York, NY: McGraw Hill, 2005. Morton, John.

More information

Graded exercise questions. Level (I, ii, iii)

Graded exercise questions. Level (I, ii, iii) Graded exercise questions Level (I, ii, iii) 248 MICRO ECONOMICS LEVEL 1 GRADED EXERCISE QUESTIONS (LEVEL I, II, III) INTRODUCTION 1. Why does an economic problem arise? 2. What is economics about? 3.

More information

INTRODUCTION TO MICROECONOMICS

INTRODUCTION TO MICROECONOMICS INTRODUCTION TO MICROECONOMICS This article provides a broad overview of microeconomics. It is intended to introduce key topics to those who have not studied microeconomics, and to offer a revision to

More information

UNIT 4 FORMS OF MARKET & PRICE DETERMINATION POINTS TO REMEMBER Market implies a system with the help of which the buyers and seller of a commodity or service come to contact with each other and complete

More information

Microeconomics. Basic Information

Microeconomics. Basic Information Microeconomics Basic Information Title: Microeconomics Code: ECN101 Credit Hours: 3 C.H. Prerequisite(s): None Classification: Compulsory Faculty Core Course Description Microeconomics is a basic core

More information

SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION. (Established in the Ministry of Higher Education, vide in Act No.

SRI LANKA INSTITUTE OF ADVANCED TECHNOLOGICAL EDUCATION. (Established in the Ministry of Higher Education, vide in Act No. Q1. Select the correct answer and Under line it (Total 16 Marks) 01. Economics is a science. Because, (a) Evidences are observable (b) Findings are measurable (c) Findings can be analyzed i a and b correct

More information

12) What determines the distribution of goods and services in a market economy?

12) What determines the distribution of goods and services in a market economy? The Principles of Economics: EOCT Review 1) What is scarcity? How is scarcity different from shortages? 2) What are the three factors of production: 3) Define "labor" and give an example: 4) Define "land"

More information

Andrew Gillespie V *

Andrew Gillespie V * Andrew Gillespie V * New to this edition xvii How to use this book ^ xviii Online Resource Centre > xx Acknowledgements Preface xxii xxiii 2 What is an economy? 3 Why all business managers should want

More information

ECONOMIC ENVIRONMENT LEVEL 1 PAPER 3 STUDY TEXT

ECONOMIC ENVIRONMENT LEVEL 1 PAPER 3 STUDY TEXT ECONOMIC ENVIRONMENT LEVEL 1 PAPER 3 STUDY TEXT www.naarocom.com Page 1 OVERALL AIM To enable the learner develop knowledge and understanding of the economic environment in which businesses operate LEARNING

More information

Unit 2 Supply and Demand

Unit 2 Supply and Demand Unit 2 Supply and Demand -Study Guide- Answer, Explain and define the following: 1) Demand 2) Consumer 3) Supply 4) Producer 5) Subsidy 6) Give examples of goods that would have inelastic demand 7) Give

More information

MICROECONOMICS SECTION I. Time - 70 minutes 60 Questions

MICROECONOMICS SECTION I. Time - 70 minutes 60 Questions MICROECONOMICS SECTION I Time - 70 minutes 60 Questions Directions: Each of the questions or incomplete statements below is followed by five suggested answers or completions. Select the one that is best

More information

Econ Microeconomics Notes

Econ Microeconomics Notes Econ 120 - Microeconomics Notes Daniel Bramucci December 1, 2016 1 Section 1 - Thinking like an economist 1.1 Definitions Cost-Benefit Principle An action should be taken only when its benefit exceeds

More information

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION.

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION. !! www.clutchprep.com CONCEPT: THE FOUR MARKET MODELS Market structure describes the environment in which a firm operates, determined by the Perfect Competition Monopolistic Competition Oligopoly Monopoly

More information

MICRO- COURSE GUIDE FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE EDEXCEL EXAM BOARD

MICRO- COURSE GUIDE FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE EDEXCEL EXAM BOARD FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE EDEXCEL EXAM BOARD MICRO- COURSE GUIDE This course guide is designed to provide schools and colleges with detailed information regarding this course which

More information

Institute of Actuaries of India

Institute of Actuaries of India Institute of Actuaries of India Subject CT7 Business Economics For 2018 Examinations Aim The aim of the Business Economics subject is to introduce students to the core economic principles and how these

More information

ECONOMICS ASSIGNMENT CLASS XII MICRO ECONOMICS UNIT I INTRODUCTION. 4. Is free medicine given to patients in Govt. Hospital a scarce commodity?

ECONOMICS ASSIGNMENT CLASS XII MICRO ECONOMICS UNIT I INTRODUCTION. 4. Is free medicine given to patients in Govt. Hospital a scarce commodity? ECONOMICS ASSIGNMENT CLASS XII MICRO ECONOMICS UNIT I INTRODUCTION 1. What is the Slope of PPC? What does it show? 2. When can PPC be a straight line? 3. Do all attainable combination of two goods that

More information

Contents EXPLORING ECONOMICS

Contents EXPLORING ECONOMICS Contents About the authors I-5 Preface to second edition I-7 Chapter-heads I-9 Syllabus : Choice Based Credit System (CBCS) I-19 1 EXPLORING ECONOMICS 1.1 Why study economics? 1 1.2 Meaning of economics

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2 Questions of this SAMPLE exam were randomly chosen and may NOT be representative of the difficulty or focus of the actual examination. The professor did NOT review these questions. MULTIPLE CHOICE. Choose

More information

REDEEMER S UNIVERSITY

REDEEMER S UNIVERSITY REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics

More information

ECON 1101 Microeconomics Notes. Table of Contents

ECON 1101 Microeconomics Notes. Table of Contents ECON 1101 Microeconomics Notes Table of Contents Comparative Advantage and the Reason for Trade... 2 Perfectly Competitive Markets... 3 Demand... 6 Special Lecture... Error! Bookmark not defined. Demand

More information

Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits)

Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits) Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits) Semester 1/2014 ----------------------------------------------------------------------------------------------

More information

2.1 Markets Definition of markets with relevant local, national and international examples

2.1 Markets Definition of markets with relevant local, national and international examples 2.1 Markets of markets with relevant local, national and international examples M&B 41 Market: Institution or mechanism that brings together the buyers ( demanders ) and sellers ( suppliers ) of particular

More information

Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits)

Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits) Lecture Time: Lecture Venue: Instructor: Faculty of Economics, Thammasat University EE 211 Principles of Microeconomics (3 credits) Semester 1/2015 ----------------------------------------------------------------------------------------------

More information

Sample. Final Exam Sample Instructor: Jin Luo

Sample. Final Exam Sample Instructor: Jin Luo Final Exam Instructor: Jin Luo Multiple Choice (2 *30 = 60) Identify the letter of the choice that best completes the statement or answers the question. 1. Price takers refer to buyers and sellers in a.

More information

!"#$#%&"'()#*(+,'&$-''(.#/-'((

!#$#%&'()#*(+,'&$-''(.#/-'(( Lecture 1 Basic Concerns of Economics What is Economics! Economics is the study of how society manages its scarce resources. o Economic Problem: How a society can satisfy unlimited wants with limited resources

More information

MULTIMEDIA COLLEGE JALAN GURNEY KIRI KUALA LUMPUR

MULTIMEDIA COLLEGE JALAN GURNEY KIRI KUALA LUMPUR STUDENT IDENTIFICATION NO MULTIMEDIA COLLEGE JALAN GURNEY KIRI 54100 KUALA LUMPUR FOUR SEMESTER FINAL EXAMINATION, 2014/2015 SESSION ECO2023 INTRODUCTION TO ECONOMICS DMGW-E-F-2/13, DMGS-E-F-2/13, DMGQ-E-F-2/13,

More information

JANUARY EXAMINATIONS 2008

JANUARY EXAMINATIONS 2008 No. of Pages: (A) 9 No. of Questions: 38 EC1000A micro 2008 JANUARY EXAMINATIONS 2008 Subject Title of Paper ECONOMICS EC1000 MICROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates

More information

Perfect Competition. What is a market structure? What is a Perfectly Competitive Market/Perfect Competition? David Kelly

Perfect Competition. What is a market structure? What is a Perfectly Competitive Market/Perfect Competition? David Kelly What is a market structure? Perfect Competition A market structure refers to the conditions under which a good or service is bought and sold. The notes that follow examine two extremes - perfect competition

More information

Principles of BABY THOMAS 2016

Principles of BABY THOMAS 2016 Principles of 1 UNIT I INTRODUCTION TO MACROECONOMICS Learning Objectives 1. Introduction to economics, meaning and definition of economics, Principles of economics 2. Economic models, the circular flow

More information

FOR MORE PAPERS LOGON TO

FOR MORE PAPERS LOGON TO ECO401- Economics Question No: 1 ( Marks: 1 ) - Please choose one Land is best described as: Produced factors of production. "Organizational" resources. Physical and mental abilities of people. "Naturally"

More information

MICRO FINAL EXAM Study Guide

MICRO FINAL EXAM Study Guide AP MICROECONOMICS-217 Name: MICRO FINAL EXAM Study Guide Instructions: Please fight senioritis! Study & be efficient with your time. DUE: Friday April 28 th (Multiple choice block 4/26 th or 27 th Free

More information

ECO-401 Economics Online Quiz 5

ECO-401 Economics Online Quiz 5 ECO-401 Economics Online Quiz 5 Question # 1 of 15 ( Start time: 04:23:56 PM ) Total Marks: 1 In the kinked demand curve model, if one firm reduces its price: Other firms will also reduce their price Other

More information

ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark)

ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark) Unit 6 I. Choose the correct answer (each question carries 1 mark) 1. A market structure which produces heterogenous products is called: a) Monopoly b) Monopolistic competition c) Perfect competition d)

More information

ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2. 1. Which of the following are factors of production?

ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2. 1. Which of the following are factors of production? ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2 1. Which of the following are factors of production? A. Output in a production function. B. Productivity. C. Land, labor, capital, and entrepreneurship.

More information

Economics General Course Year 12. Selected Unit 3 syllabus content for the. Externally set task 2019

Economics General Course Year 12. Selected Unit 3 syllabus content for the. Externally set task 2019 Economics General Course Year 12 Selected Unit 3 syllabus content for the Externally set task 2019 This document is an extract from the Economics General Course Year 12 syllabus, featuring all of the content

More information

Ch. 9 LECTURE NOTES 9-1

Ch. 9 LECTURE NOTES 9-1 Ch. 9 LECTURE NOTES I. Four market models will be addressed in Chapters 9-11; characteristics of the models are summarized in Table 9.1. A. Pure competition entails a large number of firms, standardized

More information

MICRO- COURSE GUIDE FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE AQA EXAM BOARD

MICRO- COURSE GUIDE FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE AQA EXAM BOARD FOR STUDENTS STUDYING FOR EXAMINATIONS BY THE AQA EXAM BOARD MICRO- COURSE GUIDE This course guide is designed to provide schools and colleges with detailed information regarding this course which EzyEconomics

More information

INTRODUCTION ECONOMIC PROFITS

INTRODUCTION ECONOMIC PROFITS INTRODUCTION This chapter addresses the following key questions: What are profits? What are the unique characteristics of competitive firms? How much output will a competitive firm produce? Chapter 7 THE

More information

Introduction to Business (Managerial) Economics

Introduction to Business (Managerial) Economics Contents Unit 1 Introduction to Business (Managerial) Economics Meaning of Managerial Economics... 2 Definitions of Managerial Economics... 2 Features (Characteristics) of Managerial Economics... 5 Nature

More information

ECO401 Current Online Quiz#5 500 Solved MCQs By http://vustudents.ning.com Question # 1 of 15 ( Start time: 05:41:35 AM ) Total Marks: 1 Which of the following will happen if there is an increase in the

More information

Imperfect Competition (Monopoly) Chapters 15 Mankiw

Imperfect Competition (Monopoly) Chapters 15 Mankiw Imperfect Competition (Monopoly) Chapters 15 Mankiw What did we learn one week ago? Regulated prices Effect of a ceiling price Effect of a floor price. The cost of taxes and subsidies. Tax on producers

More information

Exam#1 Review Economics:

Exam#1 Review Economics: Exam#1 Review Economics: Social Science; Study of choices Resources Renewable Nonrenewable Wants Scarcity Because of scarcity socities and economies have to answer the 3 major economic questions Limited

More information

AS Economics: ECON1 Economics: Markets and Market Failure 2009/10

AS Economics: ECON1 Economics: Markets and Market Failure 2009/10 Time allocation 2 weeks 1 st Sep - 11 th Sep Term 1 AQA Specification Additional AQA guidance Specification Section(s) The nature and purpose of economic activity 3.1.1 Candidates should understand that

More information

Principles of Economics. January 2018

Principles of Economics. January 2018 Principles of Economics January 2018 Monopoly Contents Market structures 14 Monopoly 15 Monopolistic competition 16 Oligopoly Principles of Economics January 2018 2 / 39 Monopoly Market power In a competitive

More information

2000 AP Microeconomics Exam Answers

2000 AP Microeconomics Exam Answers 2000 AP Microeconomics Exam Answers 1. B Scarcity is the main economic problem!!! 2. D If the wages of farm workers and movie theater employee increase, the supply of popcorn and movies will decrease (shift

More information

AP Microeconomics UNIT 1: WHAT IS ECONOMICS? LESSON 1: WHAT IS ECONOMICS?

AP Microeconomics UNIT 1: WHAT IS ECONOMICS? LESSON 1: WHAT IS ECONOMICS? Advanced Placement AP Microeconomics AP* Microeconomics studies the behavior of individuals and businesses as they exchange goods and services in the marketplace. Students will learn why the same product

More information

The science that studies the choices of people trying to satisfy their wants in a world of scarcity. Tangible Intangible

The science that studies the choices of people trying to satisfy their wants in a world of scarcity. Tangible Intangible economics Chapter 1 The science that studies the choices of people trying to satisfy their wants in a world of scarcity. economic system The way in which a society decides what goods to produce, how to

More information

foundations of economics fourth edition Andrew Gillespie OXFORD UNIVERSITY PRESS

foundations of economics fourth edition Andrew Gillespie OXFORD UNIVERSITY PRESS foundations of economics fourth edition Andrew Gillespie OXFORD UNIVERSITY PRESS Detailed contents Preface How to use this book About the Online Resource Centre Guided tour of Dashboard Acknowledgements

More information

Information. Course Readings:

Information. Course Readings: Academic Inquiries: Qingdao University Email: iss@qdu.edu.cn Phone: 86-532-85951196 Qingdao University 2019 SUMMER ECON 301 Intermediate Microeconomics Information Class Hours: Monday through Thursday,2

More information

Subject CB2 Business Economics Core Principles Syllabus

Subject CB2 Business Economics Core Principles Syllabus Subject CB2 Business Economics Core Principles Syllabus for the 2019 exams 1 June 2018 Business Economics Aim The aim of the Business Economics subject is to introduce students to the core economic principles

More information

FACULTY OF BUSINESS AND ECONOMICS SCHOOL OF ECONOMICS EC102: MICROECONOMICS I FINAL EXAMINATION SEMESTER 1, 2009

FACULTY OF BUSINESS AND ECONOMICS SCHOOL OF ECONOMICS EC102: MICROECONOMICS I FINAL EXAMINATION SEMESTER 1, 2009 The University of the South Pacific Serving the Cook Islands, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, and Vanuatu. FACULTY OF BUSINESS AND ECONOMICS

More information

2011/2012 AP MICROECONOMICS CONTENT MAP Mr. Crawford

2011/2012 AP MICROECONOMICS CONTENT MAP Mr. Crawford advanced placement microeconomics review UNIT TITLE CHAPTER TEST ONE LIMITS AND CHOICES 1 The MARKET SYSTEM 2 TWO SUPPLY and DEMAND 3 THREE ELASTICITY 4 MARGINAL UTILITY 6 FOUR COSTS OF PRODUCTION 7 PROFIT

More information

Understanding the implementation of the International Advanced Level in Economics June 2013

Understanding the implementation of the International Advanced Level in Economics June 2013 Understanding the implementation of the International Advanced Level in Economics June 2013 Final Draft Pearson Edexcel International Advanced Level (IAL) qualification in Economics Summary of content

More information

MICROECONOMIC FOUNDATIONS OF COST-BENEFIT ANALYSIS. Townley, Chapter 4

MICROECONOMIC FOUNDATIONS OF COST-BENEFIT ANALYSIS. Townley, Chapter 4 MICROECONOMIC FOUNDATIONS OF COST-BENEFIT ANALYSIS Townley, Chapter 4 Review of Basic Microeconomics Slides cover the following topics from textbook: Input markets. Decision making on the margin. Pricing

More information