CHAPTER 1 INTRODUCTION 1.1 DISCIPLINE OF ECONOMICS THEORY There are two different categories concerning economic behavior‚ the micro economics and macro economics. Micro economics The study of economic behavior of individual making units such as producer‚ consumer‚ household‚ and firms. Macro economics The study of economic system as a whole or on the basis of aggregate such as consumer price index‚ inflation rate‚ national income and unemployment level. 1.2 DEFINITION OF ECONOMICS
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EXERCISES Exercise 3-1 (20 minutes) a. Long-term debt [46] A 13.99 B 9.125 G -9.7 H 805.8 beg 7.5 C 9.0 D -0.17 E 8.875 F 14.8 I 772.6 end A = Retirement of 13.99% Zero Coupon Notes. B = Repayment
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I True or false.（2points*10） 1. If Good 1 is on the horizontal axis and Good 2 is on the vertical axis‚ then an increase in the price of Good 1 will not change the horizontal intercept of the budget line. 2. Henrietta’s utility function is U(x1‚ x2) = x1x2. She has diminishing marginal rate of substitution between goods 1 and 2. 3. Other things being equal‚ a lump sum tax is at least as good for a consumer as a sales tax that collects the same revenue from him. 4. Sharon spends all of her income
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0. Unit Information 0.1 Introduction Welcome to LBE 100 Microeconomics. You may be taking this unit as part of an Economics major or minor‚ or as one of the required units for professional recognition in Accounting‚ or to support your major in Finance‚ Marketing‚ Management‚ or because you recognise that some knowledge of economics is essential these days for understanding key issues in business‚ politics and society‚ whatever career you pursue. In each case‚ we hope you will enjoy the unit
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CASE : Jaguar plc‚ 1984 Kwon‚ Hyuk Joo Kim‚ Min Chang‚ Hae Yoon Jeon‚ Joohwan Question 1 How much is Jaguar worth in 1984 The firm value of Jaguar is GBP 510‚977‚000 in 1984 under the scenario (A)‚ while the firm value is GBP 215‚492‚000 under the scenario (B). Since there is no change in real exchange rate under the scenario (A)‚ we just considered the change in nominal exchange rate due to the inflation difference between the U.S and the U.K. By using the nominal exchange rate‚ we converted
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Q1 1. Assume that the current interest rate is 8%. Let’s say that investors know that normally interest rates are 10%. How would this affect investors’ decisions with regard to how much money and bond holdings to keep? Investors will want to hold more cash instead of bonds. Because the investors know that normally interest rates are 10% which is more than the current interest 8%. That is to say investors expect the interest rates would increase in the future which will cause the decrease of value
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Introduction Demand Supply Market Supply and Demand 2.301 Microeconomics Cohort 1.1 Term 4‚ 2013 Continuous Double Auction Market Introduction Demand Supply Market Supply and Demand Welcome!! Continuous Double Auction Market Introduction Demand Supply Market Supply and Demand Continuous Double Auction Market Introduction • Microeconomics is the study of how individuals and firms‚ assumed to be self-interested‚ make constrained decisions
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Chapter 2: Date of Macroeconomics 1. What components of GDP (if any) would each of the following transactions affect? What will happen to GDP? Explain. a. A family buys a new refrigerator. Answer: Consumption increases because a refrigerator is a good purchased by a household. GDP increases. b. Aunt Jane buys a new house. Answer: Investment increases because a house is an investment good. GDP increases. c. Ford sells a Mustang from its inventory. Answer: Consumption
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Production–possibility frontier In economics‚ a production–possibility frontier (PPF)‚ sometimes called a production–possibility curve‚ production-possibility boundary or product transformation curve‚ is a graph that compares the production rates of two commodities that use the same fixed total of the factors of production. Graphically bounding the production set‚ the PPF curve shows the maximum specified production level of one commodity that results given the production level of the other. By
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Introduction: With the interest rates having been cut four times since December 2009‚ by 350 basis points‚ the South African Reserve Bank (SARB) declared that the domestic economy is slowing. Two consecutive quarters of negative growth is evidence that an economy is in recession. The contraction in growth is believed to have been caused by a slump in export demand‚ forcing both manufacturers and miners to cut production. The SARB’s monetary policy committee is in meeting to discuss further rate
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