When a product seems free — as it does for some Internet services, especially in social media, check whether the product is actually you — or more accurately, your personal information that has a value to whoever is offering the service “free.”. Complete the paper on the selected situation as specified below. When economists come across distinctive features, they explore the differences between that market and a more generic one. She has taught microeconomics at both graduate and undergraduate levels since 1987. You can then choose, on the basis of your investigations, and sometimes on which party you want to support. This is in contrast to macroeconomics, which focuses instead on the economy of an entire nation as a whole. Microeconomic Analysis of Coca-Cola. This paper will assess the business operations of the Netflix Company from a microeconomics viewpoint examining and discussing how factors such as products supply and demand conditions, price elasticity of demand, cost of production, market entry barriers, market share, and market structure effect Netflix’s performance in their market. When people place a demand on a product, businesses usually respond by adjusting supplyof a good or service. Peter Antonioni is a senior teaching fellow at the Department of Management Science and Innovation, University College, London, and coauthor of Economics For Dummies, 2nd UK Edition. Title: Microeconomic Analysis Author: Jean-Benoit Gregoire Rousseau Last modified by: Jean-Benoit Gregoire Rousseau Created Date: 9/28/2009 7:02:22 PM – A free PowerPoint PPT presentation (displayed as a Flash slide show) on PowerShow.com - id: 7375ba-YWU0Y Browse Microeconomics news, research and analysis from The Conversation ... spurt of economic growth or productivity growth A new meta-analysis of 59 econometric studies finds it is yet to do … Answer: D. 13) The objective of creating a permit trading system for SO2 (sulfur dioxide) is to . Trade is possible because people value things differently. To an economist, this is just a fact of life, and you may as well complain about gravity as about scarcity. Microeconomic analysis is the study of how the actions of individual people and business firms affect the economy. The completed paper is a professional report and is due in Week 3 (230 points). That means that getting your best level of utility is always about trading off one thing for another. It is economic theory in a microscope. You say you've taken Calculus 3; expect basically the opposite of your Calc 3 final for this final. Individuals, in terms of how they make decisions on consumption depending on the money they earn and the price of the products they consume, are at the heart of … Research Proposal on General Motors Microeconomic Analysis of General Motors Assignment The General Motors Corporation was founded in 1908 in Detroit, Michigan by William Crapo Durant. Economists aren’t trying to say a given market should be exactly like this or that. For example, if you have decided to go clubbing, how many drinks do you buy? All microeconomics is built on the idea that consumers and producers make choices about what to make or what to buy. These tactics can prevent a rival, even one producing at a lower cost, from competing and taking away some market share. Lynne Pepall, PhD, is a professor of economics at Tufts University. Seek out the opportunities that always exist for entrepreneurs with good ideas for reducing transactions costs for buyers and sellers. Wikibuy Review: A Free Tool That Saves You Time and Money, 15 Creative Ways to Save Money That Actually Work. This is a decision where we use marginal analysis. As a […] Microeconomics examines how these decisions and behaviors affect … Discuss the conditions required for a practical implementation of the Micro-economic model include the interaction between natural, industrial and household. January 14, 2018. In the last section we showed how to make a binary decision, but not all decisions fit that category. In addition, the way that individual firms set production levels and than set prices for the goods that they produce are also analyzed by those interested in microeconomics. In a perfectly competitive market, competition is only ever on price, which is always forced down to the marginal cost of production for the marginal firm. For a start, when transaction costs are high, a market in many cases is not the most efficient organizational design. Once the supply rises in response to this, demand will lessen. At what point equilibrium is reached between supply and demand is of great concern to those focused on microeconomics. Clearly explain your chosen question, method, and conclusions. The following are illustrative examples of … For this reason, economists look carefully at barriers to market entry and work to get them down as low as possible in the long run. Microeconomics then considers patterns of supply and demand as dictated by the aggregate of individual decisions and the factors that influence these cost-benefit relationships. Homeworks are the best practice for exams, they give you a sense of the relevant content areas that might come up, the type and style of questions that I ask, and you often get answer keys to help you “get inside my head” and study from. As Mick Jagger sang, you can’t always get what you want. Microeconomics (from Greek prefix mikro- meaning "small" and economics) is a branch of economics that studies the behavior of individuals and small impacting players in making decisions on the allocation of limited resources (see scarcity). Microeconomics analyzes the markets and determines the prices for services and goods that best allocate limited resources. This law, which can also be found in macroeconomic analysis, basically states that these two factors will often move in inverse proportion to one another. The final project will be a business plan that uses statistical tools and economic theory to create a comprehensive analysis of the microeconomic and macroeconomic environment in which the focal company operates. D) A and B. Microeconomic analysis is the study of how the actions of individual people and business firms affect the economy. Giggsa Nieves. Economists have great respect for this creativity, which is one reason why they want to see what can be achieved without intervening, before coming up with ways to intervene. People are essentially creative in such situations. At the heart of microeconomic analysis is the law of supply and demand. It is also important for businesses to set price levels where they are able to maximize profits. When they come up against an unfavorable economic situation, they try to find solutions to get around the problem. Helpful to understand the working of the economy You only get to know what value people place on something after they choose it — or as economists say, you get to know people’s preferences when they have chosen (they also say that there are as many valuations as people). Where macroeconomics looks at the big picture of the economy, microeconomics looks at the individual behaviors that drive economic processes. Well, economic models are built from no greater assumption than that people follow their own interests — and in so doing, create firms, organizations, production, and consumption, and all the things that make the world go round! Perform a microeconomic analysis of one appropriate economic issue or phenomenon of your choice. Your task is to conduct an economic analysis of an issue that you select yourself, just as business people and policymakers do. … Many are ‘how much’ decisions. Microeconomic Analysis. A) What goods/services to produce . Apple ’ s iPhone Microeconomic Analysis . The phrase you can‘t beat the market is the kind of saying that drives economists to distraction. b). These topics constitute the core of our review of microeconomic theory. When economists say that you can’t beat the market, they’re pointing out that they know that markets can be shown to achieve the highest level of efficiency. This field of study deals with factors that influence individual economic choices. The microeconomic theory or price theory thus is the study of individual parts of the economy". How Do I Choose the Best Economic Analysis Books? Any time a market isn’t perfectly competitive, the firms in the industry are getting a greater share of the gains from trade. Microeconomics studies how the decisions and interactions of individuals and businesses affect the economy. For instance, in microeconomic analysis we study the demand of an individual consumer for a good and from there we go to derive the market demand for a good (that is demand of a group of individuals for a good). There are two additional topics that do not fit neatly into the sections noted above, but we think you should know about them in order to understand the economic analysis of legal rules and institutions. Select one situation from the items outlined below: my paper will use Situation B. Watch your wallet when anyone claims to be able to beat the market in the long run. If the firms that make such products push prices too high, consumers may react and find other alternatives. The alternative is generally pleasing neither to people who want things cheap nor to those who want good quality. Perform a microeconomic analysis of one appropriate economic issue or phenomenon of your choice. The Microeconomic Paper tests your ability to apply economic principles to a business decision. An economic principle, the Theory of the Second Best, reminds you that if you can’t get the optimal solution, then there may be second-best alternatives. Economists recommend that you look carefully at the inefficiency and the external cost in this situation before coming up with a solution. Complete the paper on the selected situation as specified below. The macroeconomic analysis, on the other hand, will focus on the macroeconomic factors that are likely to affect the success of the company. Perform a microeconomic analysis of one appropriate economic issue or phenomenon of your choice. Students that do not do the homeworks do poorly on exams, which often are similar to homework questions. The course presents modern microeconomic theory and a set of applications. The paper will start with historical overview of the Netflix Company and conclude with recommendations based on the analysis suggesting how Netflix could run its future oper… People value things in different ways, and economists want to look at the consequences of, rather than the reasons for, those values. How supply and demand relates to price levels also is a major factor in microeconomic analysis. Sometimes, an unaccounted cost falls upon another person — an external cost — and sometimes there are costs associated with just finding the person to trade with — transactions costs. Well, if they could, someone would come in and compete them away. Key concepts, theories and methods of modern economic analysis will be consolidated and applied to everyday economic issues and problems. Economic Models and Math. But just because a market finding a competitively sustainable solution is difficult, that doesn’t mean it’s impossible. Consumers lose out because the incumbent producers produce less, for higher cost, and take more of the surplus. Knowledge of microeconomics can help nonprofit change agents to understand the effects of policy design better and realize implications of current news sooner. As long as things are scarce, you have to make choices. Respecting choice All microeconomics is built on the idea that consumers and producers make choices about what to make or what to buy. A Microeconomist’s View to Minimizing Costs within a Firm, Consumption Bundles, Utility, and Possible Sets, How to Shift the Budget Constraint to Represent an Increase…, By Lynne Pepall, Peter Antonioni, Manzur Rashid. Explain your answer, giving some specific examples of such that incentives and disincentives. The completed paper is a professional report. As a result, at some point you have to choose between one option and another because you can’t have both. Important note: at this level of economics, knowing how to do things (calculate elasticity, do simple math in simple word problems about total cost and average cost, etc) is not nearly as important as understanding the concepts being taught. Microeconomic models are necessarily simplistic; although real-world markets are complex, with many different variables and competing firms, a microeconomic model may assume only two competing companies selling a solitary product, for example. In simpl… What function of microeconomic analysis did this policy address? This is not an example of the work produced by our Essay Writing Service. It is economic theory in a microscope. Your task is to conduct an economic analysis of an issue that you select yourself, just as business people and policymakers do. Sometimes they propose ways to make such markets more productive or efficient. The desire to trade creates the need for a means to trade things — a market. The job market is the supply and demand for labor, where employees are suppliers, and employers demand. Do you think that economic incentives and disincentives influence family size decisions? The other is to take the individuals that make up an economy, both the people who consume and the businesses that produce, and see how they react to different economic stimuli. Academia.edu is a platform for academics to share research papers. This problem is one reason why firms tend to choose either to be the lowest-cost competitor or a high-quality competitor. Manzur Rashid, PhD, is a lecturer at New College of the Humanities, where he covers second-year micro- and macroeconomics. Part C: Quantitative Analysis(Show all your work with graphical analysis). What Are the Different Types of Property Market Analysis. A good rule for looking at the world is that if you see a free lunch, ask who’s paying for it: If you’re not, someone else probably is. But in fact economists are the world’s greatest optimists. The alternative is to change your focus and try to make your product different or distinctive from the other competitors and, in so doing, make nonzero profits. Are there very high sunk costs? To an economist, the key question is what makes those costs as low as possible? Microeconomics studies the economic behaviorof individual isolated units of the economy, such as a specific person, a household, a company or an industry. Remember these ten tips as you continue your study in microeconomics. Economists use models as the primary tool for explaining or making predictions about economic issues and problems. The applications considered include: The theory of economic decision making under risk and uncertainty, including the important notions of risk aversion and stochastic dominance Instead, they ask a number of questions: Is the market like that because people value things in a particular way? Its innovative products have made Apple one of the major players and leaders in this industry. Analysts study how businesses manage costs incurred in the process of hiring labor and procuring resources. Markets do have unique and distinctive features — such as, for example, in health care — that often vary from place to place and product to product. An argumentative essay on the microeconomic market structure Opportunity costs. Microeconomic analysis gas stations Pages: 2 (330 words) Marketing Case Analysis: Curtis Automotive Hoist Sample Pages: 4 (949 words) Keynes’s Analysis of the Stock Market and Identifying the Related Policy Sample Pages: 9 (2074 words) Case Question Sample Pages: 2 (385 words) For the most part, microeconomics and macroeconomics examine the same concepts at different levels. Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments. Microeconomics plays an important role in the business decision-making process. In several situations, a market has difficulty pricing a good. Economists have two pieces of advice here: Think carefully about where the inevitable costs of using a market fall. Your task is to conduct an economic analysis of an issue that you select yourself, just as business people and policymakers do. Clearly explain your chosen question, method, and conclusions. The microeconomic theory or price theory thus is the study of individual parts of the economy". The applications considered include: The theory of economic decision making under risk and uncertainty, including the important notions of risk aversion and stochastic dominance It guides the business managers in optimal resource utilization, demand analysis, cost analysis, optimal production decision, and pricing policy. Microeconomics is a huge area of study, but following are many of the most important core ideas of microeconomics. The aim of this unit is to provide an economic analysis of consumer behaviour, producer behaviour and markets. Assignment Requirements . Clearly explain your chosen question, method, and conclusions. You can view samples of our professional work here. Marginal Analysis. As the public demand for a product rises, the supply will dwindle. Microeconomics has some advice for you though. Individuals, in terms of how they make decisions on consumption depending on the money they earn and the price of the products they consume, are at the heart of microeconomic analysis. How does the microeconomic theory of fertility relate to the theory of consumer choice? They may erect barriers to do so — including advertising, investing in things that involve sunk costs, and making their product or brand different or unique in the consumer’s eye. Firms must also decide when they need to alter the fixed inputs, such as factories or salary structures, they have for production. It focuses on the economic behavior of individuals as well as businesses. For example, a monopolist doesn’t compete with itself, which can mean that you can get a better range of product diversity when there is less competition. But in many market structures, competing on price is tough, and firms have an incentive to focus on other dimensions of their product. Although getting the optimal isn’t possible, you can certainly argue about what the next best thing is. Public goods — such as street lighting, public parks, or even law enforcement — are another case, one made worse by the impossibility of excluding people who haven’t paid for these services from using them. One case is when the marginal cost of the good is at or near zero — a competitive market ends up with no one being able to price above zero and everyone scrambling around for other ways to make money. 2308 words (9 pages) Essay. This concept is known as the elasticity of demand, and it is crucial to macroeconomics. Microeconomic decisions by both small businesses and individuals are mainly motivated by cost and benefit considerations. The economist’s model of consumer behavior is called a constrained optimization — because ultimately you’re trying to do your best given that you can’t have everything. [1] Typically, it applies to markets where goods or services are bought and sold. MBA 502. Select one situation from the items outlined below: A toD. As a result, they always have an interest in preventing another firm from coming in and competing away the gains. What Is the Connection between Market Research and Competitive Intelligence? Given that resources are scarce, it is important to make use of microeconomics to make sound business decisions. Apple is one of the world ’s leading technological companies. Generic models form a starting point for comparison. Why? By weighing the profits and the … Businesses are also a big part of a thorough microeconomic analysis. For example, an economist might try to explain what caused the Great Recession in 2008, or she might try to predict how a personal income tax cut would affect automobile purchases. Microeconomic Analysis to the Demand for Labor. This is in contrast to macroeconomics, which focuses instead on the economy of an entire nation as a whole. The use of economic analysis is to give you hard figures for business decisions, rather than going with your gut or your hopes. Plus, it’s just not realistic to suggest, for instance, that all firms should abandon management structures and replace them with internal markets. It is hard to describe and fully understand economics without looking at the labor market. Microeconomic Analysis is a standard module on advanced microeconomic theory, providing modern treatments of consumer theory, production theory, choice under uncertainty and general equilibrium analysis. There are two different methods used by economic experts to dissect economic factors. Is a distortion involved, such as a tax or a subsidy? As a result, economists tend to have a healthy respect for choice itself. The Microeconomic Paper tests one’s ability to apply economic principles to a business decision. This type of study is known as microeconomic analysis. There are some products which will generate demand even when their price levels rise. Most importantly, economists look very carefully at why a particular market exhibits those features before they rush in and call it a market failure. The answer isn’t as simple as just saying that a market inevitably keeps those costs at the lowest possible level. Microeconomics is the study of the economic behavior of individuals, households and firms. There are times when economists give two cheers to markets that aren’t competitive. For instance, in microeconomic analysis we study the demand of an individual consumer for a good and from there we go to derive the market demand for a good (that is demand of a group of individuals for a good). When this occurs, it is said that the short run, in economic terms, becomes the long run, and how prices and costs adjust in this period is another important part of microeconomics. 23rd Sep 2019 Business Reference this Disclaimer: This work has been submitted by a university student. B) How to produce the goods and services . Actually, it’s the study of markets and their key elements – supply and demand at the personal and corporate level and scarcity of goods. Microeconomics is a popular subfield of economics. Always be skeptical of people’s claims that they can make long-run profits — and therefore, if you’re an investor, returns — greater than the average of those in the market they’re in. The nonprofit sector is not only good for society, but it is an essential economic actor. Political analysts use policy analyses to identify and evaluate the advantages and disadvantages of specific government policies and to suggest and analyze alternative options. Nestle Nutrition is a multinational company that produces and sales nutritional supplements in the form of foodstuffs and drinks (Nestlé, 2013). When you hear politicians arguing about what to do, remember that often the argument isn’t about what the best thing is, but which of several “practical” options is the second best. One way is to take the economy of an entire nation and analyze the way that factors like inflation, interest rates, and employment levels sway the economic conditions at large. C) Who gets the goods and services . Microeconomic analysis functions through modeling and by emphasizing interests. Even though economists generally prefer free exchange — and therefore markets — as their way of achieving goals, using those markets isn’t always costless. However, you need to invest to do that, and if you’re investing in keeping the product different or better, you’re using resources that you could’ve spent on getting costs down. If you compete on price, over the long run, the price gets pushed down to average cost, and the firm doesn’t make profits. "Microeconomics is the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions affect others." If you start in monopolistic competition — which is a common market structure — you can see why. The course presents modern microeconomic theory and a set of applications. 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