Micro Economic - 1890 Words

1. PRINCIPES OF ECONOMICS-MANKIEW CHAPTER 1- QUESTION FOR REVIEW (18) No 3. What is inflation and what causes it? = Inflation is an increase in the overall level of prices in the economy. Inflation happen because culprit is growth in the quantity o money when a government creates larges quantities of the nation’s money, the value of the money. No 5. Explain the two main causes of market failure and give an example of each! = Externality, is the impact of one person’s action on the well being of a bystander Example: pollution. = Market power, is the ability of a single economic actor (or small group of acors) to have a substantial influence on market prices. Example : if everyone in town needs water but there is only one well,†¦show more content†¦No. 9. What is a competitive market? Briefly describe a type of market that is not perfectly competitive. = competitive market is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. * Monopolistic competition = market characterized by numerous buyers and relatively numerous sellers trying to differentiate their product from those of competitors. * Oligopoly = market characterized by a handful of (generally large)sellers with the power to influence the prices of their products. * Monopoly = market in w hich there is only one producer that can therefor set the prices of its products 5. PRINCIPLES OF ECONOMICS-MANKIEW CHAPTER 5-QUESTION OF REVIEW (109) No. 5. If the elasticity is grearter than 1, is demand elastic or inelastic? If the elasticity equals 0, is demand perfectly elastic or perfectly inelastic? = If the elasticity is greater than 1, and demand is elastic.if the elasticity yequals 0, demand is perfectly inelastic No 9. List and explainthe four determinantsof the price elasticity of demand discussed in the chapter. * Availability of close substitutes Goods with close substitutes tend to have more elastic demand because it is easier for consumer s to switch from that goods to others. * Necessities versus luxuries Necessities tend to have inelastic demands,Show MoreRelatedEconomics : Economics And Micro Economics1238 Words   |  5 Pages Economics is the study of how our unlimited demand of certain things can be met by our limited amount of supply. For instance, if there was an unlimited amount of money for everyone, then everyone would have everything they had always wanted and would not have to work to get the money. Everyone would have billion dollar homes and the nicest cars in the world. Unfortunately, we do have a limited amount of money, so the economists find ways to get around that. There are two types of economicsRead MoreMacro Micro Economics2304 Words   |  10 Pagesâ€Å"Economics has never been a science - and it is even less now than a few years ago.†Ã¢â‚¬ ¦Paul Samuelson INTRODUCTION Economics  is the  social science  that analyzes the  production,  distribution, and  consumption  of  goods  and  services. A focus of the subject is how  economic agents  behave or interact and how  economies  work. A given economy is the result of a process that involves its  technological evolution,  history  and  social organization, as well as its  geography,  natural resource endowment, and  ecologyRead MoreIntroduction to Micro-Economics2163 Words   |  9 Pages#61548;Economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. 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Microeconomics can be easily understood through the term micro itself which means small, microeconomics focuses on small level that is to say it includes areas of individual decision makingRead MoreImportance Of The Micro Economic Environment1471 Words   |  6 PagesActivity one: 1.1Explain the importance of the micro-economic environment to business organisations: Microeconomics looks at how individual players in the economy, such as households and firms, interact. It focuses on the impact that their economic choices have on the allocation of scarce resources to meet unlimited demand. These interactions match what one party wants or demands in economic term and what the other gives in exchange (supply). 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Therefore, we can look at microeconomics as dealing with small quantities of the whole or specifics. At this end, microeconomics deals with things at an individual level and studies issues such as consumer behavior, individual labor market and supplyRead MoreEssay on Micro Economic Imperfect Market694 Words   |  3 Pages1. Consider a personal computer market with two firms, X and Y. Suppose that Firm X and Y have the following total cost function: TCX=10QXTCY=10QY . The market is given by P=100-QX-QY. (a) Calculate the Cournot equilibrium outputs of firm X and Y in this market. (b) Calculate their market price in the Cournot equilibrium. (c) Calculate their profits in the Cournot equilibrium. (d) Suppose that firm X is considering implementing a proprietary technology they have developed. The onetime sunk costRead MoreMicro Economics Study Questions1289 Words   |  6 PagesFigure 10-1 [pic] a) Refer to Figure 10-1. The marginal product of the 3rd worker is ______ b) Refer to Figure 10-1. The marginal product of the 7th worker is ______ c) Refer to Figure 10-1. The average product of the 4th worker ______ d) Diminishing marginal productivity sets in after ______ 15) If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is ______ 16) If 11 workersRead MorePrinciples Of Economics : Micro Summer 1 20151856 Words   |  8 PagesGiovanna Kiamos Professor Rukhama Halim Principles of Economics: Micro SUMMER 1 2015 August 5, 2015 Monopoly Market Structure The word monopoly derives from the Greek meaning (monos ÃŽ ¼ÃÅ'ÃŽ ½ÃŽ ¿Ãâ€š (alone or single) + polein πωÎ »ÃŽ µÃ¡ ¿â€"ÃŽ ½ (to sell). A monopoly is a market structure in which there is only one supplier of a product and/or service for which there is no competition or close substitute – a true testament to its Greek meaning. This paper will take a closer look at the Monopoly Market Structure and