Microeconomics - 1441 Words

Question 1) With examples give 5 reasons why the study of microeconomics is important. Microeconomics is a field of economic study that focuses on how an individual s behaviour and decisions affect the supply and demand for goods and services. For the purpose of microeconomics, the actions of individuals, households and businesses are crucial, unlike the study of macroeconomics, which focuses on national and international economic trends. Despite the differences between the two fields, however, micro-level trends and the study of microeconomics are considered the basis of modern macroeconomics. Macroeconomics is concerned with the big picture, for example, the national economy and gross domestic product. By contrast, microeconomics is†¦show more content†¦Ceteris Paribus is a Latin phrase that translates approximately to holding other things constant and is usually rendered in English as all other things being equal. In Economics the term â€Å"Ceteris Paribus† is used quite often to assume all other factors to remain the same, while analysing the relat ionship between any two variables. For example, when discussing the laws of supply and demand, one could say that if demand for a given product outweighs supply, ceteris paribus, prices will rise. Here, the use of ceteris paribus is simply saying that as long as all other factors that could affect the outcome such as the existence of a substitute product remain constant, prices will increase in this situation. One of the disciplines in which ceteris paribus are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes and the theoretical relationship of cause and effect. When using ceteris paribus in economics, assume all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases, ceteris paribus, the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good. This operational description intentionallyShow MoreRelatedMicroeconomics And Macroeconomics Of Microeconomics1565 Words   |  7 PagesAbstract Economics is an enormous field. The term economics is the broader term, however within this, there are additional fields such as microeconomics and macroeconomics. The difference between microeconomics and macroeconomics is analogous to the human body and the individual cell that makes up the human body. Macroeconomics is involved with the wide lens aspect of society. In other words, macroeconomics focuses on the broader large scale economy of a society. Macroeconomics focuses on largerRead MoreMicroeconomics : The Consumer Perspective1796 Words   |  8 PagesAbstract This paper explores the different subject matters of microeconomics through the consumer perspective. A broad definition of microeconomics is the study of how individuals make decisions in the presence of scarcity (Sullivan, 2011). Microeconomics is affected by the law of supply and demand which is constantly changing by the purchasing power of the consumers and the availability of products. The purchasing power of the consumer is determined by their wants versus their needs, and what theirRead MoreMicroeconomics of Customer Relationships930 Words   |  4 PagesReading: Microeconomics of Customer Relationships â€Æ' Reading: Microeconomics of Customer Relationships The follow is a critique and review of the reading of Microeconomic of Customer Relationships by Fred Reichheld. I will review the article and evaluate Mr. Reachheld. I will also apply economic theories into why and how I came to my conclusions. Overview on the Reading Microeconomic of Customer Relationships by Fred Reichheld is based on a simple survey based customer-relationship metricRead MoreMicroeconomic Theory Essay1757 Words   |  8 PagesRunning head: Module 1 Homework Module 1 Homework Michael J Feller Allied American University Author Note This paper was prepared for ECN 150: Introduction to Microeconomics, Module 1 Homework taught by Dr. Dani Babb. PART I Directions: Please draft a three page long document in APA format in which you address the questions below. 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It is important to study economics even if you are not a business owner. For example, understanding economics and the market, you could better determine when to buy a house or when to start up a business. In a YouTube video titled â€Å"AP Econ Music Video Microeconomics SPHA† , a group of teenagers worked on a musicRead MoreEssential Graphs for Microeconomics2295 Words   |  10 PagesEssential Graphs for Microeconomics Basic Economic Concepts ( Production Possibilities Curve Nature Functions of Product Markets ( Demand and Supply: Market clearing equilibrium (Floors and Ceilings (Consumer and Producer Surplus (Effect of Taxes Theory of the Firm (Short Run Cost (Long Run Cost Read MoreMicroeconomics Cheat Sheet3925 Words   |  16 PagesMarket Structure | NumberofSellers | TypeofProduct | BarrierstoEntry? | DemandCurve | Profit Maximization Condition | Perfect Competition | Many | Homogenous | No | Horizontal (perfectly elastic) | MR = MC | Monopoly | One | Unique | Yes | Downward Sloping | MR = MC | Monopolistic Competition | Many | Differentiated | No | Downward Sloping | MR = MC | Oligopoly | Few | Homogenous or Differentiated | Yes | Downward Sloping | MR = MC | The natural monopoly may be regulated through price, profitRead MoreManagerial Economics : Microeconomics And Macroeconomics Essay838 Words   |  4 PagesThe purpose of the individual assignment is to read each chapter and then summarize the chapter. The first chapter summarized is chapter one. Managerial Economics uses microeconomics and macroeconomics principals to manage businesses. This analytical approach gives a logical aspect to management. Hopefully with a logical approach using economic theories this will enable managers to maximize managerial decision to increase profits. There are seven forces that can affect long-run profitabilityRead MoreMicroeconomics: The Foundation behind Small Businesses1130 Words   |  5 PagesMicroeconomics: The Foundation behind Small Businesses Small business are said to be the backbone of the United States economy. It said that small businesses contribute to growth and vitality in the specific area of the United States economic development. Small businesses play a huge role in how the business world is shaped. Entrepreneurs are smart, creative and innovative however, those same entrepreneurs need to have some knowledge that the study of microeconomics focuses on. With the study