To help all students, here accompanied ebook chapter 2 of the Textbook.
Monday, 19 September 2011
TUTORIAL NOTES NO:1
This is the NO:1 of my Tutorial notes of a microeconomics course MES3023 students.The Notes is posted on the Internet, and access is entirely free.I am grateful for allowing it to be downloaded.
What is Microeconomics?
Economics is studied from two different perspectives, the macro view and the micro view. Macroeconomics is the study of the determination of economic aggregates such as national output, the level of employment, the price level and the rate of economic growth. Microeconomics studies resource allocation and income distribution as they are affected by the free working of the price system and specific government policies. How, for example, do firms and households make spending choices? What determines an individual's wages? How does the availability of public housing affect supply in the housing market?
Scarcity, Choice and Opportunity Cost
Scarcity of resources forces everyone to make choices. For example, faced with a fast approaching mid-term exam, a student could either study or go to a party. In this case, the cost of having a good time can be measured in terms of lost marks on the mid-term. Such a cost is called an opportunity cost.Opportunity cost, the measurement of the cost of something in terms of forgone alternatives, is fundamental to the study of economics. This concept can be illustrated by a production possibilities frontier, a graphical representation of the combinations of goods and services that are just attainable when all of society's resources are efficiently employed. .
TUTORIAL NOTE NO:1
What is Microeconomics?
Economics is studied from two different perspectives, the macro view and the micro view. Macroeconomics is the study of the determination of economic aggregates such as national output, the level of employment, the price level and the rate of economic growth. Microeconomics studies resource allocation and income distribution as they are affected by the free working of the price system and specific government policies. How, for example, do firms and households make spending choices? What determines an individual's wages? How does the availability of public housing affect supply in the housing market?
Scarcity, Choice and Opportunity Cost
Scarcity of resources forces everyone to make choices. For example, faced with a fast approaching mid-term exam, a student could either study or go to a party. In this case, the cost of having a good time can be measured in terms of lost marks on the mid-term. Such a cost is called an opportunity cost.Opportunity cost, the measurement of the cost of something in terms of forgone alternatives, is fundamental to the study of economics. This concept can be illustrated by a production possibilities frontier, a graphical representation of the combinations of goods and services that are just attainable when all of society's resources are efficiently employed. .
TUTORIAL NOTE NO:1
Tuesday, 13 September 2011
MES 3023: An Introduction to Microeconomics
The Scope of Microeconomic Theory.
The prefix micro- in microeconomics comes from the Greek word mikros, meaning small. It contrasts with macroeconomics, the other branch of economic theory. Macroeconomics deals primarily with aggregates, such as the total amount of goods and services produced by society and the absolute level of prices, while microeconomics analyzes the behavior of “small” units: consumers, workers, savers, business managers,
firms, individual industries and markets, and so on. Microeconomics, however, is not limited to “small” issues. Instead, it reflects the fact that many “big” issues can best be understood by recognizing that they are composed of numerous smaller parts. Just as much of our knowledge of chemistry and physics is built on the study of molecules, atoms, and subatomic particles, much of our knowledge of economics is based on the
study of individual behavior. Individuals are the fundamental decisionmakers in any society. Their decisions, in
the aggregate, define a society’s economic environment. Consumers decide how much of various goods to purchase, workers decide what jobs to take, and business owners decide how many workers to hire and how much output to produce. Microeconomics encompasses the factors that influence these choices and the way these innumerable small decisions merge to determine the workings of the entire economy. Because prices have important effects on these individual decisions, microeconomics is frequently called price theory.
firms, individual industries and markets, and so on. Microeconomics, however, is not limited to “small” issues. Instead, it reflects the fact that many “big” issues can best be understood by recognizing that they are composed of numerous smaller parts. Just as much of our knowledge of chemistry and physics is built on the study of molecules, atoms, and subatomic particles, much of our knowledge of economics is based on the
study of individual behavior. Individuals are the fundamental decisionmakers in any society. Their decisions, in
the aggregate, define a society’s economic environment. Consumers decide how much of various goods to purchase, workers decide what jobs to take, and business owners decide how many workers to hire and how much output to produce. Microeconomics encompasses the factors that influence these choices and the way these innumerable small decisions merge to determine the workings of the entire economy. Because prices have important effects on these individual decisions, microeconomics is frequently called price theory.
Microeconomics is based on the belief that most behavior can be explained by assuming consumers have stable, well-defined preferences and they make rational market choices consistent with these preferences. This provides the foundation for building economic models.
A model is used to simplify reality from which conclusions are logically deduced about some system. A system is a group of units interacting to form a whole - For example, consumers and producers interact to form a market system.
Consider a model of consumer behavior with the following assumptions:
1. Consumer is rational and attempts to maximize satisfaction (utility)
2. Consumer has a fixed level of income
3. Commodities (goods and services) vary continuously, and utility consumer derives from them is measurable
4. Consumer has a given set of preferences for these commodities
5. Commodity prices are constant
Monday, 12 September 2011
MES 3023 - MICROECONOMICS
COURSE DESCRIPTION
This course will cover the area of economics commonly defined as microeconomics which is concerned with the individual parts of the economy such as individual businesses or industries, individual consumers, and individual products. Our goal is to study whether the economy uses our limited resources to obtain the maximum satisfaction possible for society. We will concentrate on three issues or goals: ALLOCATIVE EFFICIENCY, PRODUCTIVE EFFICIENCY, and EQUITY (efficiency, efficiency, and equity).
This course will cover the area of economics commonly defined as microeconomics which is concerned with the individual parts of the economy such as individual businesses or industries, individual consumers, and individual products. Our goal is to study whether the economy uses our limited resources to obtain the maximum satisfaction possible for society. We will concentrate on three issues or goals: ALLOCATIVE EFFICIENCY, PRODUCTIVE EFFICIENCY, and EQUITY (efficiency, efficiency, and equity).
MES 3023 - MICROECONOMICS
FAKULTI PENGURUSAN PERNIAGAAN DAN PERAKAUNAN
Peringatan: Kandungan Maklumat Semasa Kursus ini tidak boleh diubah tanpa kelulusan jabatan / bahagian berkenaan.
| Academic year : | Semester 1 2009/2010 |
| Code : Course : Credit hours : | MES 3023 MICROECONOMICS 3 |
| Required Text Main references : | 1. Robert S.Pindyck dan Daniel L.Rubinfeld (2003), Microeconomics, 6th Edition, Prentice-Hall, New York 2. Dominick Salvatore (2003), Microeconomics Theory and Applications. 4th Edition. Oxford University Press, Inc. 3. Robert H.Frank (2003), Microeconomics and Behavior, 3rd edition, Mc Graw Hill. 4. Jack Hirshleifer dan David Hirshleifer (1998), Price Theory and Applications, 6th edition, Prentice-Hall, New York |
| Teaching Tools/ Equipments : | White board, LCD Projector |
| Teaching & Learning Methods : Blog Learning: | Lecture, Assignment, Tutorial, Quiz and Mid Semester Examination http://lecture67.blogspot.com/ |
| Lecturer : Tel / email : | TENGKU KHAIRI BIN TENGKU A.RAHMAN 0145433146 / lecture67@gmail.com |
| Day / Lecture time : Room : | Wednesday 8am-10am. GC22 |
| Grading | Aplia Exercises and Quizzes (15%) Test (15%) Midexam (20%) Final Exam (50%) |
Saturday, 2 April 2011
Oligopoly
Lecture Series No:12
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived, by analogy with "monopoly", from the Greek ὀλίγοι (oligoi) "few" + πωλειν (polein) "to sell". Because there are few sellers, each oligopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists needs to take into account the likely responses of the other market participants.
Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict production in much the same way as a monopoly. Where there is a formal agreement for such collusion, this is known as a cartel. A primary example of such a cartel is OPEC which has a profound influence on the international price of oil.
Monopolistic competition
Lecture Series No:11
Monopolistic competition is a form of imperfect competition where many competing producers sell products that are differentiated from one another (that is, the products are substitutes but, with differences such as branding, are not exactly alike). In it, a firm takes the prices charged by its rivals as given but ignores the impact of its own prices on the prices of other firms.[1] In monopolistic competition, firms can behave like monopolies in the short run, including using market power to generate profit. In the long run, other firms enter the market and the benefits of differentiation decrease with competition; the market becomes more like perfect competition where firms cannot gain economic profit. However, in reality, if consumer rationality/innovativeness is low and heuristics is preferred, monopolistic competition can fall into natural monopoly, at the complete absence of government intervention.[2] At the presence of coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the firm maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition was Edward Hastings Chamberlin in his pioneering book on the subject Theory of Monopolistic Competition (1933).[3] Joan Robinson also receives credit as an early pioneer on the concept
Monopolistic competition is a form of imperfect competition where many competing producers sell products that are differentiated from one another (that is, the products are substitutes but, with differences such as branding, are not exactly alike). In it, a firm takes the prices charged by its rivals as given but ignores the impact of its own prices on the prices of other firms.[1] In monopolistic competition, firms can behave like monopolies in the short run, including using market power to generate profit. In the long run, other firms enter the market and the benefits of differentiation decrease with competition; the market becomes more like perfect competition where firms cannot gain economic profit. However, in reality, if consumer rationality/innovativeness is low and heuristics is preferred, monopolistic competition can fall into natural monopoly, at the complete absence of government intervention.[2] At the presence of coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the firm maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereal, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition was Edward Hastings Chamberlin in his pioneering book on the subject Theory of Monopolistic Competition (1933).[3] Joan Robinson also receives credit as an early pioneer on the concept
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