Micro Economics PDF

Micro Economics Christian mendoza Red = Important History of Economics “The primary purpose of economic activity...

Micro Economics Christian mendoza Red = Important History of Economics “The primary purpose of economic activity should be the overall enhancement of the Social Mechanisms Marketing Basic Economic Problems These are induced to solve economic problems Production To justify making quality of life” Distribution something, there must Green = Definition “People in poverty are deprived of choice” Aristotle Brute Force use of physical power or coercion to resolve economic issues. Retailing Product Development Consumption be someone who will consume it Communicating Advertisements Socrates Economics Oikos - Household Tradition Delivering Sales Purple = Names/Dates/Places dmckryptonite 469 - 399 BCE Past ways of allocating resources To Justify value, you Nomos - Distribution/Management must deliver value Father of Western Philosophy Authority Economics is the study of how individuals, firms, and society dmckryptonite Blue = Theories Socratic Method ( Answering the question: Why?) choose to use scarce resources that nature and the past relies on established institutions or individuals with recognized power to make and enforce economic decisions. (government and generations has provided. Church) Emphasized self examination, ethical conduct, wisdom Case, Fair, Oster Market Analyzing Choices interaction of supply and demand to determine prices and Economics is the Science of Wealth Opportunity Cost Marginalism White= Formula His findings was foundational to ethical conduct, economic behavior, and responsible Goods which satisfies allocate resources. The best alternative we forgo or Analyzing the additional or human wants incremental costs or benefits resource allocation Merkatus - A place of trade give up when making a decision dmckryptonite Social science that studies the behavior of consumers Marketing arising from a choice or decision Orange = Vocabulary A place of trade where business is carried on towards meeting unlimited needs and wants with limited dmckryptonite resources Positive or Normative Economics First Transactions Plato Study of how people make choices dmckryptonite Lydians Positive Normative 7th Century, Asia Minor ( Modern day : Turkey) Concerned with the description of Gives importance to ethical 477 - 347 BCE Adam Smith First to use gold and silver for transactions economic events and tries to formulate theories to explain judgment. Concerned with he ideal rather than actual dmckryptonite Authored “ The Republic” ( the books presents a Father of modern economics them class based society) Examined society’s problems Reflected on the association of resources and Particularly how wealth is generated and the role of property in the society distributed. Resources - Material things ( tangible and intangible ) Divisions of Economic Theory Incentives - external motivators that explain people’s choices “Consumers consumer and desire more and more Wealth goods and services” Microeconomics Macroeconomics Aristotle Study of small economy. Study of whole or large economy. Considers the questions on Considers the questions on scarce goods that satisfy Characteristics Classification Scarcity Tension between unlimited needs distribution and allocation prices, unemployment, policies wants and has money value Possess Utility Personal 384 - 322 BCE and wants and limited resources and stability. Stocks of goods existing at Limited in supply (individual wealth) a given time that have Transferable Social or Collective Two Forms of Wealth Worked on the book “Politics” money value Monetary Value Wealth Contained his thoughts about economic May be extternal National Wealth matters and governance (a +b) Goods Chrematistics Oikonomiya Cosmopolitan wealth (e.g. Ocean) Anything that satisfies Clasification Human want Consumer Goods Wealth accumulation for own sake Prudent management of resources Perishable Problematic for the well-being of the household Durable Producers Goods Stems from greed ( society) Economic Systems & Supply and Demand Law of Supply and Demand Specialization Factors of Production Negative relationship between price Law of Demand and quantity demanded Used to produce goods and services. Individuals and countries should specialize in producing things in which they have comparative advantage and then As price decreases, quantity demanded increases trade with other countries that specialize in something else. Land Natural resources that are limited and This trade is mutually beneficial irreplaceable (Rent). As price increases, quantity demanded decreases. Labor Invisible hand unintended social benefits resulting Manual (manpower/work) and intellectual from individual actions (planning) labor. (Salary/Wages) Markets Place where buyer and seller exchange Capital Equilibrium Price goods and services Things used to produce (Interest) a price at which the quantity of product = quantity of product Price SIgnals Information that markets generate to Entrepreneurship in demand Equilibrium Quantity guide. used to allocate resources efficiently Developing new products or find new ways to do quantity demanded or supplied is at the equilibrium price things (Income). 4 Market Behaviors Demand - Willingness of the Consumers drives the economy Supply can decrease consumers to buy Economic Planning Supply can increase Supply - Desire of sellers to Demand can increase produce and offer goods that Positive relationship between price Costs What to produce? consumers are willing to buy Law of Supply and quantity of a good supplied How to produce? Demand can increase Anything that you can give up for something else Households Ceteris Paribus - Cost of Who gets it? Provides factors of production (land, labor, capital, production remain constant As price decreases, quantity quantity supplied decreases Explicit Implicit 4 basic assumptions about entrepreneurship)and return they receive wages, rent, interest, and profits. Input - Materials used Opportunity lost Output - Goods and services. Money Spent Consumers As price increases, quantity supplied increases Businesses offer goods and services purchased by households and the Desire Many Goods Rational government. Determinants of... Government Have to pay for goods interacts with both the government and households. Demand Supply Have limited income Income Price of inputs Points outside the curve. Unattainable Price of related goods Technology with the current resource and tech Economic Systems Taste and preferences Price expectation Price expectations Taxes and subsidies Points on the curve. Economy Population Price of other goods utilized all resources optimally Command Capitalist Taxes and subsidies central government dictates Private ownership. Free market Points inside the curve. Resources permissible levels of production alone controls the production of are underutilized. goods and services. Socialist Mixed Populist economic and political Combines both capitalism and system based on collective, socialism. common, or public ownership of the means of production