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1、微观经济学英文课件微观经济学英文课件OutlineEssential Microeconomics PrinciplesUses of MicroeconomicsApplication 1Subtopic 1:Economic PrinciplesEconomic is an academic discipline of social science Economic is an academic discipline of social science that provides discourse about the allocation of limited that provides
2、 discourse about the allocation of limited resources in economy to produce goods and services resources in economy to produce goods and services to satisfy unlimited wantsto satisfy unlimited wantsEconomics,indeed,is a broad discipline itself.Economics,indeed,is a broad discipline itself.Microeconom
3、ics and macroeconomics are two Microeconomics and macroeconomics are two separated but interrelated branches of economics.separated but interrelated branches of economics.There are many more fields that each served to focus There are many more fields that each served to focus on a particular area of
4、 study.on a particular area of study.Continuously,Social ScienceEconomicsMicroeconomicsMacroeconomicsIndustrial financialHuman CapitalEnvironmentalOthersMathematical EconomicsEconometricsApplied StatisticsEdited by Yong,E.L.Continuously,Microeconomics Focuses on the study of choice and decision maki
5、ng for an individual household and firm,while macroeconomics studies the behaviour of the economic as a whole.There is a few principles about microeconomics in some books,while more in othersContinuously,Basically,the general principles are:n nScarcity of resourcesScarcity of resourcesn nOpportunity
6、 costsOpportunity costsn nIncreasing opportunity costIncreasing opportunity costn nReal Opportunity CostReal Opportunity Costn nReal Opportunity cost and inefficiencyReal Opportunity cost and inefficiencyEdited by Yong,E.L.Continuously,0Quantity of AppleQuantity of Apple Pieabcd6712 1310962Edited by
7、 Yong,E.L.Continuously,Assumptions inside the Production possibility Assumptions inside the Production possibility Frontier(PPF)Frontier(PPF)n nFactors of production is fixed;labour and capital and no Factors of production is fixed;labour and capital and no technology developmenttechnology developme
8、ntn nAgent involved is firm/producer who face Agent involved is firm/producer who face economic economic problemsproblems and and questionsquestionsn nThe concept of increasing opportunity applied.The concept of increasing opportunity applied.n nProducers are rational.Producers are rational.n nNorma
9、l good:Apple and Apple pieNormal good:Apple and Apple pien nAt a particular price,place and time(PPPT)At a particular price,place and time(PPPT)Edited by Yong,E.L.Continuously,If the firm produces 10 units of apple and 6 units of apple pie wants to increase the production of apple pie by one unit to
10、 the 7th unit.It has to forgo 1 unit of apple so that resources can be shifted to produce the additional apple pie;Opportunity Cost is thus 1.Edited by Yong,E.L.Continuously,If the firm produces 6 units of apple and 12 units of apple pie wants to increase the production of apple pie by one unit to t
11、he 13th unit.It has to forgo 2 units of apple so that resources can be shifted to produce the additional apple pie;Opportunity Cost is thus 2.Edited by Yong,E.L.Continuously,Thus,it is obvious that opportunity cost has increased from 1 to 2 unitsWhat should the opportunity cost should be measured in
12、 real term than in money term?n nIf it is measured in money term,see what happen:If it is measured in money term,see what happen:Suppose apple costs$10 per unit and apple pie costs Suppose apple costs$10 per unit and apple pie costs$20 per unit.Thus,the opportunity cost remains 1.$20 per unit.Thus,t
13、he opportunity cost remains 1.Suppose cost of both goods doubled,$20 for apple and Suppose cost of both goods doubled,$20 for apple and$40 for apple pie.Thus,the opportunity cost remains 1.$40 for apple pie.Thus,the opportunity cost remains 1.Edited by Yong,E.L.Continuously,Now,ask yourself if the p
14、roduction by the firm efficiently or equally produced?n nFirstly,tell which one do you think is possible:Firstly,tell which one do you think is possible:Efficient or equal or both.Efficient or equal or both.n nSecondly,tell the reason for it to be efficient or Secondly,tell the reason for it to be e
15、fficient or equal or both.equal or both.n nThirdly,give your creative point of view of how Thirdly,give your creative point of view of how such equal and efficient condition can be disturbed such equal and efficient condition can be disturbed or achieved.or achieved.Edited by Yong,E.L.Continuously,1
16、)In this example,you should choose to say that the PPF is 1)In this example,you should choose to say that the PPF is efficient efficient 2)In the sense that resources are utilized in maximum amount to 2)In the sense that resources are utilized in maximum amount to produce both goods,as shown at poin
17、t a,b,c and d.However,produce both goods,as shown at point a,b,c and d.However,any point inside the PPF should not be efficient due to unused any point inside the PPF should not be efficient due to unused resources.Points beyond the PPF are unreachable due to resources.Points beyond the PPF are unre
18、achable due to insufficient resources.insufficient resources.3)Give a point to how this might be disturbed.3)Give a point to how this might be disturbed.-If Health Ministry imposes a new law to reduce apple pie due-If Health Ministry imposes a new law to reduce apple pie due to obesity in children a
19、nd increase apple production,the to obesity in children and increase apple production,the producer may not be able to find the best combination of producer may not be able to find the best combination of resources for the new plan of production set by the resources for the new plan of production set
20、 by the government.government.Edited by Yong,E.L.Subtopic 2:Uses of Microeconomics Microeconomics has its essential application in every aspect of human behaviour,which related to scarcity,choice and decision making,PPPT.However,it doesnt mean that every decision making process based on economic pri
21、nciples must be right and the best.n nEX:The fund-hedge collapse by two Economics EX:The fund-hedge collapse by two Economics Nobel Prize WinnerNobel Prize WinnerEdited by Yong,E.L.Continuously,The study of microeconomics can help one to The study of microeconomics can help one to conceptualize impo
22、rtant decisions that concern to conceptualize important decisions that concern to ones life and this is ho it offers a way to make better ones life and this is ho it offers a way to make better decision.decision.One obvious application of microeconomics is in the One obvious application of microecon
23、omics is in the business field;firmsbusiness field;firmsn nA firm that wants to enter the biotechnology industry,for A firm that wants to enter the biotechnology industry,for instance,must at least know the degree of demand for instance,must at least know the degree of demand for biotechnology produ
24、cts in the market,the resources biotechnology products in the market,the resources available to produce the products and the opportunity cost available to produce the products and the opportunity cost of using the resources in the production.of using the resources in the production.Edited by Yong,E.
25、L.Continuously,Microeconomics is also used for evaluating broad question in regards to government policy(although this is more to macroeconomics).n nChanges into new law and regulation may cause Changes into new law and regulation may cause economic resources allocated inefficiently as economic reso
26、urces allocated inefficiently as shown at the previous example.shown at the previous example.Edited by Yong,E.L.Subtopic 3:ApplicationConsider the market for minivans.If people decide to have more children,what would happen to the price and quantity in the minivan market?n nThree level of responsesT
27、hree level of responsesAssumptionsAssumptionsDescription of your answerDescription of your answerYour judgement about equity and efficiency Your judgement about equity and efficiency Edited by Yong,E.L.Continuously,AssumptionAssumptionn nFactors involved are minivan and price of minivans and Factors
28、 involved are minivan and price of minivans and there are more children now;ceteries paribus.there are more children now;ceteries paribus.n nAgents involved are minivan producers and households,Agents involved are minivan producers and households,who face economic problems and questions.who face eco
29、nomic problems and questions.EX;of basic economic problems:Each household is constraint with EX;of basic economic problems:Each household is constraint with limited income,thus minivan is the best choice compared to other limited income,thus minivan is the best choice compared to other better vehicl
30、es,which now the opportunity cost.better vehicles,which now the opportunity cost.EX;of basic economic questions:(What)Each household demands EX;of basic economic questions:(What)Each household demands minivan for maximizing utility.(How Much)Each household minivan for maximizing utility.(How Much)Ea
31、ch household demands the number of quantity of minivan is determined by the demands the number of quantity of minivan is determined by the price and income.(How)Households must allocate income price and income.(How)Households must allocate income efficiently to purchase minivan.(For who)Households p
32、urchase efficiently to purchase minivan.(For who)Households purchase the minivan from the minivan producers for family usage.the minivan from the minivan producers for family usage.Edited by Yong,E.L.Continuously,The law of demand and supply applied Normal goods RationalityEdited by Yong,E.L.Continu
33、ously,Price per unit of MinivanQuantity of MinivanSSD0D0E0D1D1E1Q1Q0P1P00Edited by Yong,E.L.Continuously,Now ask yourself if this is efficient or equity.Why?n nI think this is an equity because total demand is I think this is an equity because total demand is equal to total supply.equal to total sup
34、ply.n nIf country restricts the number of children for each If country restricts the number of children for each family,the equilibrium condition may no longer family,the equilibrium condition may no longer hold.hold.Edited by Yong,E.L.Continuously,Price per unit of MinivanQuantity of MinivanSSD0D0E
35、0D1D1E1Q1Q0P1P00Edited by Yong,E.L.E2Q2P2Further RevisionPrinciple of Microeconomics _ Chapter 1&2Students are expected to do at least 3 hours revision or frequent revision for this chapter as for preparation for assignments,mid-term,final examination and further education benefit.Each Student is required to submit at least one page report to the instructor for this chapter before final exam.Edited by Yong,E.L.