ECON 2150 Chapter 1 With Complete Solutions 100% Accurate
Microeconomics definition - ANSWER Microeconomics is the study of how individual
economic decision-makers such as consumers, workers, firms or managers allocate
scarce resources among alternate uses.
the social sciences that studies choices that cope with scarcity and incentives.
This study involves both the behavior of these economic agents on their own and the
way their behavior interacts to form larger units, such as markets.
Who should study microeconomics? 5 - ANSWER Policy Makers, Managers, Union
Leaders
,Lenders
Business Owners
Societies must answer these questions that relate to microeconomics:
3 - ANSWER 1. What goods and services will be produced and in what quantities
2. Who will produces these services and how will they produce them
3. Who will receive these goods and services and how will they get them
Microeconomic models need to: 3 - ANSWER Resemble Reality,
Be Understandable,
, Be an Appropriate Scale,
exogenous variables - ANSWER Variables that have values taken as given in the
analysis (Y=f(x) if x is given to use then it is exogenous variable. When we use x and get
the value of y it is called endogenous variable.)
endogenous variables - ANSWER Variables that have values determined as a result of
the model's workings
6 restraints - ANSWER Time,
Budget,
Other Resources,
Technical Capabilities,
The Marketplace,
Rules Regulations and Laws,
behaviour can be modelled as - ANSWER optimizing the objective function, subject to
various constraints.
constraints - ANSWER are whatever limits is placed on the resources available to the
agent.
marginal impact - ANSWER of a change in the exogenous variable is the incremental
impact of the last unit of the exogenous variable on the endogenous variable. important
because decisions are made at margin to find optimal choioce.
Ex. y=f(x) where x is exogenous (given to us) and get y which is endogenous. Looking at
the impact of x on y is the marginal impact. For example if change in x is 1 then the
change in y shows the marginal impact. Lets say if change in x=2 then the marginal
impact has to be found by doing change in y/change in x because we want change of
each individual unit. If the change is small for x so close to 0 instead of it being triangle x
it will be dx and the corresponding change in y is dy, now the marginal function is dy/dx.
Microeconomics definition - ANSWER Microeconomics is the study of how individual
economic decision-makers such as consumers, workers, firms or managers allocate
scarce resources among alternate uses.
the social sciences that studies choices that cope with scarcity and incentives.
This study involves both the behavior of these economic agents on their own and the
way their behavior interacts to form larger units, such as markets.
Who should study microeconomics? 5 - ANSWER Policy Makers, Managers, Union
Leaders
,Lenders
Business Owners
Societies must answer these questions that relate to microeconomics:
3 - ANSWER 1. What goods and services will be produced and in what quantities
2. Who will produces these services and how will they produce them
3. Who will receive these goods and services and how will they get them
Microeconomic models need to: 3 - ANSWER Resemble Reality,
Be Understandable,
, Be an Appropriate Scale,
exogenous variables - ANSWER Variables that have values taken as given in the
analysis (Y=f(x) if x is given to use then it is exogenous variable. When we use x and get
the value of y it is called endogenous variable.)
endogenous variables - ANSWER Variables that have values determined as a result of
the model's workings
6 restraints - ANSWER Time,
Budget,
Other Resources,
Technical Capabilities,
The Marketplace,
Rules Regulations and Laws,
behaviour can be modelled as - ANSWER optimizing the objective function, subject to
various constraints.
constraints - ANSWER are whatever limits is placed on the resources available to the
agent.
marginal impact - ANSWER of a change in the exogenous variable is the incremental
impact of the last unit of the exogenous variable on the endogenous variable. important
because decisions are made at margin to find optimal choioce.
Ex. y=f(x) where x is exogenous (given to us) and get y which is endogenous. Looking at
the impact of x on y is the marginal impact. For example if change in x is 1 then the
change in y shows the marginal impact. Lets say if change in x=2 then the marginal
impact has to be found by doing change in y/change in x because we want change of
each individual unit. If the change is small for x so close to 0 instead of it being triangle x
it will be dx and the corresponding change in y is dy, now the marginal function is dy/dx.
