Prices & Markets
Prices & Markets
Lecture 1: Demand & Supply
© Martin Byford 2012
Definition: Economics /iːkəәˈnɒmɪks, ɛk-/ noun The social science that analyses the production, distribution and consumption of goods and services given unlimited wants and scarce resources. ORIGIN late 16th cent. (denoting the science of household management): from ta oikonomika, the name of a treatise by Aristotle (or his student Theophrastus).
Definition: Microeconomics /ˌmʌɪkrəәʊ-/ noun That part of economics concerned with the choices made by individual economic agents (such as households and firms, or buyers and sellers) and the interactions of these choices in markets. eg. In order to undertake a microeconomic analysis it is first necessary to understand the objectives of the individual economic agents.
Microeconomics in Business
If you do not understand economics you do not understand business! Microeconomics shows us how prices affect the number of sales, revenue and profits that a firm can realise. Microeconomics also helps us understand the role of product variety (differentiation), reputation (brands), contracts (HR & outsourcing) and government (taxes & regulations). Microeconomic theory is the foundation for most fields of business study.
The Language of Economics
Clear communication requires a common understanding of language. It is important to be precise and succinct when discussing economic phenomena. In economics we use a number of special terms to convey specific economic meanings; these meanings are not always the same as the common usage of the words. You are expected to become fluent in the use of the language of economics.
Definition: Market /ˈmɑːkɪt/ noun A collective term for the buyers and sellers of a good or service, and the institutions and arrangements by which they come together to trade. eg. As a result of the large number of farmers producing wheat, the market for grain is very competitive. ORIGIN Middle English, via Anglo-Norman French from
Lecture 1: Demand & Supply
© Martin Byford 2012
Definition: Economics /iːkəәˈnɒmɪks, ɛk-/ noun The social science that analyses the production, distribution and consumption of goods and services given unlimited wants and scarce resources. ORIGIN late 16th cent. (denoting the science of household management): from ta oikonomika, the name of a treatise by Aristotle (or his student Theophrastus).
Definition: Microeconomics /ˌmʌɪkrəәʊ-/ noun That part of economics concerned with the choices made by individual economic agents (such as households and firms, or buyers and sellers) and the interactions of these choices in markets. eg. In order to undertake a microeconomic analysis it is first necessary to understand the objectives of the individual economic agents.
Microeconomics in Business
If you do not understand economics you do not understand business! Microeconomics shows us how prices affect the number of sales, revenue and profits that a firm can realise. Microeconomics also helps us understand the role of product variety (differentiation), reputation (brands), contracts (HR & outsourcing) and government (taxes & regulations). Microeconomic theory is the foundation for most fields of business study.
The Language of Economics
Clear communication requires a common understanding of language. It is important to be precise and succinct when discussing economic phenomena. In economics we use a number of special terms to convey specific economic meanings; these meanings are not always the same as the common usage of the words. You are expected to become fluent in the use of the language of economics.
Definition: Market /ˈmɑːkɪt/ noun A collective term for the buyers and sellers of a good or service, and the institutions and arrangements by which they come together to trade. eg. As a result of the large number of farmers producing wheat, the market for grain is very competitive. ORIGIN Middle English, via Anglo-Norman French from