MICROECONOMICS CHAPTER 1 The Market Economy What is to be done? —Lenin When future historians look back on the close of the 20th century‚ one of the most sweeping changes they will note is the collapse of centrally planned economies in Eastern Europe. It is not far off to say that the Cold War between the United States and the Soviet Union was won not by the armies of the United States and its allies‚ but by the productive power of Western market economies. Mikhail Gorbachev‚ then leader of the Soviet
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Limited resourcesTime‚ money. * Inability to satisfy all of our wants * Faced with scarcity we must choose among available alternatives * Trade offs * Incentive: Reward that encourages and action or penalty that discourages * Microeconomics: Choices of: * Individuals * Businesses * The way these choices interact in markets and the influence of the government * Macroeconomics: * Study of the performance of the national economy and the global economy * E.g.
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determining the price and quantity of goods and services that can be offer to sell in a free market. Graph 1.0 shows the supply and demand curves Supply is the relationship of the quantities of a goods or services that the sellers are able and willing to sell at each price within a specific time period. The law of supply claims that the increasing in the price of goods will leads to an increase in the quantity supplied. The quantity supply is directly proportional to the price of goods. Therefore
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SUBJECT NAME : MICROECONOMICS SUBJECT CODE : BEC1001 ACADEMIC YEAR : AY 2012/2013‚ OCT SEMESTER “By submitting this work‚ we are declaring that we are the originators of this work and that all other original sources used in this work have been appropriately acknowledged. We understand that plagiarism is the act of taking and using the whole or any part of another person’s work and presenting it as our own without proper acknowledgement. We also
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whether each of the following statements applies to microeconomics or macroeconomics‚ and why: 12 Marks Total a. The unemployment rate in Canada was 7.0 percent in January 2010 Answer: This is the macroeconomic statement because it describes the unemployment rate of the whole country. b. A Canadian software firm discharged 15 workers last month and transferred the work to India. Answer: This is the microeconomic statement because it focuses in an individual Canadian
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Supply will not be affected. The result is a rise in both the price and the quantity sold‚ as Figure 12 shows. B. A strike by steel workers raises steel prices. Ans: demand is affected‚ strikes raise steel prices‚ steel workers ’ wages will increase‚ increased demand for home station wagon. Meanwhile‚ the domestic steel prices increased input prices rise wagon‚ supply reduction. Ans in : . If a strike by steelworkers raises steel prices‚ the cost of producing a minivan rises and the supply of
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EC 3101: Microeconomic Analysis II A/P Indranil A/P Indranil Chakraborty All relevant details on EC3101 are in the syllabus The morning office hours on Tuesday will start from the third week of lectures t tf th thi d k fl t Important Highlights Important Highlights • Text book: Intermediate Microeconomics: A modern h approach by Hal R. Varian (8th edition) One midterm and one final exam Please do not email material‚ lecture or exam related questions. Post your questions precisely on IVLE Forum or ask
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Statement (1):If the price of shoes decreases‚ then the demand on socks will decrease as well because the two goods are complement goods. This statement is false : because they are complement goods so is the price of (x) which is shoes decreases the quantity demand of (y) which is socks must increases. In other words the price of shoes decreases the demand on socks must increase. Statement (2): A tax imposed on furniture production in an economy (X) will lower the price of furniture in the
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global market‚ all of these were already in high demand.As a result of the increase in natural gas prices‚ fertilizers costs‚ residential heating and electricity rates rise since they are complementary goods.Another effect of the natural gas prices‚ some fertilizing plants chose to close while others decided to cut production.On top of all of these factors‚ a frigid winter would incrementally increase prices unless people would be willing to conserve the natural gas or if the efficiency improves.In conclusion
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1. Long-run full-employment equilibrium assumes: a. a downward-sloping production function. b. a downward-sloping long-run supply curve (LRAS). c. the CPI index price level equals the equilibrium wage rate. d. the CPI equals aggregate demand (AD) equals short-run aggregate supply (SRAS) equals long-run aggregate supply (LRAS). ____ 2. Which of the following would cause a decrease in the short-run aggregate supply curve (SRAS)? a. An increase in oil prices. b. An advance in technology
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