,Microeconomic
Introduction
"The that studies human behavior
Def .
Economics :
science as a
relationship
between ende and scarce means that have alternative uses
"
Micro. Eco Macro-Eco
how houssholds & Studies how the
firms economy
make decisions and how whole
interact in markets
they works as a
household individual who purchase
firstgood and services and provides inputin production , ...
firm-organisation who buy production land to produce thesegoods and services , , .
..
Defnomic activity the amount
ofinteractio betwe househo ad firm the
o ,
amount
buying selling
and the in
economy period of time over a .
all the production and exchange activities that take place specific region
:
in
economy a
-
.
land all the natural resources the earth
=
of
labour the human effort that production both mented as
into
physical
r
goes ,
the and itructures
capital -
equipment used to produce
goods and services
scarcity - the limited nature
how
of society's resources
= the
economic
study of society marages scarce resources
10 M &T principles
14 : how people make decisions
how
5 7 :
people interact
8 10 =
Marrio -
Eco
trade-offs
MAT Principle 1 People face :
.
it reveals
peoples preferences , - benefits outweigh the cost
Def equity thelooks
:
property of distributing
that the
economic
prosperity fairly among
the members
ofsociety ,
benefits of outcomes are distributed
fairly among society's
members
example :
efficiency referr to the size of the ,
economic
equity refers how it is divided
to
, Principles : The cost
something
choices ofhave
is what
you give up
to
get it
some
benefitstoand cost
=
opportunity cost what have
-
you give up
=
the values
=
explicit cost+
implicit cost ofbest alternative you don't chass
the cast
you jay if you choosex
example :
go
to lecture
study meet with friends
Benefite 28 t = 32
wantjsbetult
3
15
= 22 ,
by cost > 0 to = 10 so voor activiteit
des
benifits in enbel
infl cost t 22
- boat van 32-10
t 28 - 28
t 22 meer
t 6 E -13 t -
6
Def opportunity cost
: - whatever must be given up to obtain some i the value
item
ofthe sorrificed berfit
Principles : Rational people think at the
margin
have
when z
different choices benefits ,
the
difference between the benifiti-margin
Def :
marginal changes = small adjustments to a
plan of action to improve
that has
as
change something
economic
agents = an individual ,
firm organization
or in some
way impact
on an
economy
Principles 4 :
People respond to incentives
Rational actors
change their behavior
if costs and/or benefits change (sufficiently)
, CH 3 The market forces
:
Market & Marketstructure
ofsupply and demand
=
A sellers
group of buyers of particular good
a or service
Monopolyfirellethirirchilli
Structures sort e
:
a
Monopolistic competitio sell
-"n
Heterogeneou
many firm good :
Perfect conjetition many firms Homogeneous goods
sell :
buyers & sellers are
pricetakers pricedictatedby market, ex. market
for wheat
wongly are price setters
Def Competitive market
: =
a market in which there are
many
and sellers
each has a negligible impart the marketprice on
buyer so that
Demand-veag
Individual demand
willing (and able) pay differentprices
- hav much a consumer is to at
graph how much is demoed on
%D
f(p) function ofprice
r
= : a
-
N
invers demand what price is a
f(43) willing to payper unitfor different an
·
consumer
p
= = :
-
equation (2)
-b qp ex 0 %
> : =
.
: a
p
.
p
=
,
9D
higher p : -income
effect purchasing power :
=>
In
substitution bes attractive
effect goods becomes
-
:
=> an
Market demand how much all consumers are
willing andable to pay at different prices
Inverse horizontal summation
of individual demand curves
may differ anang
Consume 1 consumer 2
comune
is -m
each y I's consumer
Y
for
·
,
i
ru -
e :
3
y 3
>
=
3
2
3 2
1816
39D 39D 39D 1075202538
%
24 6 & 1813
Market demand curve the
given quantity demanded at differt prices
,
:
assuming
other factors that
affect demand are constant
(90)m
f(y0 y of182 Y T, PLs E)
=
A
fm
, +
, ..., , ,
, ,
zibea
Mich other
goods
tinverse)" : 195/m =
flow ,
given (i , Joh , . . ., Na -
n
, Y
,
T
,
Pus A El
, ,
Introduction
"The that studies human behavior
Def .
Economics :
science as a
relationship
between ende and scarce means that have alternative uses
"
Micro. Eco Macro-Eco
how houssholds & Studies how the
firms economy
make decisions and how whole
interact in markets
they works as a
household individual who purchase
firstgood and services and provides inputin production , ...
firm-organisation who buy production land to produce thesegoods and services , , .
..
Defnomic activity the amount
ofinteractio betwe househo ad firm the
o ,
amount
buying selling
and the in
economy period of time over a .
all the production and exchange activities that take place specific region
:
in
economy a
-
.
land all the natural resources the earth
=
of
labour the human effort that production both mented as
into
physical
r
goes ,
the and itructures
capital -
equipment used to produce
goods and services
scarcity - the limited nature
how
of society's resources
= the
economic
study of society marages scarce resources
10 M &T principles
14 : how people make decisions
how
5 7 :
people interact
8 10 =
Marrio -
Eco
trade-offs
MAT Principle 1 People face :
.
it reveals
peoples preferences , - benefits outweigh the cost
Def equity thelooks
:
property of distributing
that the
economic
prosperity fairly among
the members
ofsociety ,
benefits of outcomes are distributed
fairly among society's
members
example :
efficiency referr to the size of the ,
economic
equity refers how it is divided
to
, Principles : The cost
something
choices ofhave
is what
you give up
to
get it
some
benefitstoand cost
=
opportunity cost what have
-
you give up
=
the values
=
explicit cost+
implicit cost ofbest alternative you don't chass
the cast
you jay if you choosex
example :
go
to lecture
study meet with friends
Benefite 28 t = 32
wantjsbetult
3
15
= 22 ,
by cost > 0 to = 10 so voor activiteit
des
benifits in enbel
infl cost t 22
- boat van 32-10
t 28 - 28
t 22 meer
t 6 E -13 t -
6
Def opportunity cost
: - whatever must be given up to obtain some i the value
item
ofthe sorrificed berfit
Principles : Rational people think at the
margin
have
when z
different choices benefits ,
the
difference between the benifiti-margin
Def :
marginal changes = small adjustments to a
plan of action to improve
that has
as
change something
economic
agents = an individual ,
firm organization
or in some
way impact
on an
economy
Principles 4 :
People respond to incentives
Rational actors
change their behavior
if costs and/or benefits change (sufficiently)
, CH 3 The market forces
:
Market & Marketstructure
ofsupply and demand
=
A sellers
group of buyers of particular good
a or service
Monopolyfirellethirirchilli
Structures sort e
:
a
Monopolistic competitio sell
-"n
Heterogeneou
many firm good :
Perfect conjetition many firms Homogeneous goods
sell :
buyers & sellers are
pricetakers pricedictatedby market, ex. market
for wheat
wongly are price setters
Def Competitive market
: =
a market in which there are
many
and sellers
each has a negligible impart the marketprice on
buyer so that
Demand-veag
Individual demand
willing (and able) pay differentprices
- hav much a consumer is to at
graph how much is demoed on
%D
f(p) function ofprice
r
= : a
-
N
invers demand what price is a
f(43) willing to payper unitfor different an
·
consumer
p
= = :
-
equation (2)
-b qp ex 0 %
> : =
.
: a
p
.
p
=
,
9D
higher p : -income
effect purchasing power :
=>
In
substitution bes attractive
effect goods becomes
-
:
=> an
Market demand how much all consumers are
willing andable to pay at different prices
Inverse horizontal summation
of individual demand curves
may differ anang
Consume 1 consumer 2
comune
is -m
each y I's consumer
Y
for
·
,
i
ru -
e :
3
y 3
>
=
3
2
3 2
1816
39D 39D 39D 1075202538
%
24 6 & 1813
Market demand curve the
given quantity demanded at differt prices
,
:
assuming
other factors that
affect demand are constant
(90)m
f(y0 y of182 Y T, PLs E)
=
A
fm
, +
, ..., , ,
, ,
zibea
Mich other
goods
tinverse)" : 195/m =
flow ,
given (i , Joh , . . ., Na -
n
, Y
,
T
,
Pus A El
, ,
