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Microeconomics Articles;

Comprehensive forecasts impossible

Corn prices hit a 10-year high this week on news of the U.S. Department of Agriculture's latest estimates of world supply and demand, specifically a 2006 crop that was somewhat smaller than 2004 and 2005, strong demand worldwide and burgeoning U.S. ethanol production.

Consumer Surplus

Consumer surplus is a measure of the welfare that people gain from the consumption of goods and services, or a measure of the benefits they derive from the exchange of goods.

Human quirks throw wrenches into theories

Economists are finally acknowledging that humans are not fully rational. Squirrels in our back yard are grinding that home to me, but somehow I don't appreciate the lesson.

Human quirks throw wrenches into theories

Economists are finally acknowledging that humans are not fully rational. Squirrels in our back yard are grinding that home to me, but somehow I don't appreciate the lesson.

MİKROEKONOMİ ve MAKROEKONOMİ

MİKROEKONOMİ ve MAKROEKONOMİ

Positive and Normative Statements

Whenever you are reading articles on current affairs it is important to be able to distinguish where possible between objective and subjective statements.

Price Volatility in Markets

We often find that prices in markets rise and fall by large amounts over a short time period. They display a high level of volatility which directly affects both consumers and producers

Production and Costs

Production refers to the output of goods and services produced by businesses within a market. This production creates the supply that allows our needs and wants to be satisfied.

Productivity

The American economist Paul Krugman once said that “productivity isn’t everything, but in the long run it is almost everything.”

Theory of Demand

Demand is defined as the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period.

Alcohol tax makes sense, up to a point

The Minnesota Medical Association apparently understands that taxing harmful products can pay off for society. The physicians group recently called for a 10-cent per drink increase in excise taxes on alcohol, with one member arguing it will "lead to a reduction in the levels and the frequency of drinking and heavy drinking among our youth."

Barriers To Entry

The existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business.

Battling Society's Cancer: Unemployment

The official figures are staggering: 35% of the workforce - about 280,000 people - are unemployed and looking for a job. Each 1.43 employee support 1 unemployed person. In the USA the figure is 3.3 to 4 employees supporting all the unemployed AND all the pensioners!

Benefit-Cost Analysis

Whenever people decide whether the advantages of a particular action are likely to outweigh its drawbacks, they engage in a form of benefit-cost analysis (BCA). In the public arena, formal BCA is a sometimes controversial technique for thoroughly and consistently evaluating the pros and cons associated with prospective policy changes.

Coca-Cola needs to master simple lessons about price discrimination

Coca-Cola really blew it recently when it said it developed a new vending machine with a thermometer that will raise prices when the weather is hot.

Competition Laws and Industrial Action

Should the price of labor (wages) and its conditions be left entirely to supply and demand in a free market - or should they be subject to regulation, legislation, and political action?

Consumer & Producer Surplus

In this note we recap the concepts of consumer and producer surplus that were covered as part of the AS economics course and we then use them to help analyse some of the welfare effects of the market structures visited in previous notes.

Cross Price Elasticity of Demand

Very often, a change in the price of one product leads to a change in the demand for another, economists call this the cross-price effect and this is the focus of this chapter.

Demand "elasticity" key to profits

The U.S. economy is challenged by high energy costs, rising interest rates and the eventual effects of prolonged federal budget deficits.

Demand for product has domino effect

The effects of booming U.S. demand for ethanol and Asian imports work their way backward through the economy.

Distribution of Income & Wealth

In this note we consider the scale of income and wealth inequalities in the UK. Why does inequality happen? And what government policies have been applied to affect the final distribution of income?

Does raising profit margin increase costs?

If you arbitrarily raise your profit margin will you increase costs?

Drug-plan confusion wastes resources

Economists have been slow to recognize the importance of information to efficient resource use.

Easy trade-offs are hard to come by

The central idea of economics is that there is always a catch, a trade-off that must be faced in choosing any alternative. The technical term for this is "opportunity cost."

Easy trade-offs are hard to come by

The central idea of economics is that there is always a catch, a trade-off that must be faced in choosing any alternative. The technical term for this is "opportunity cost."

Economics: California holds pricing lessons

Amid the frenzied finger-pointing taking place because of California’s electric power problems, everyone apparently has forgotten an important economic principle known as the First Law of Holes.

Efficiency

To economists, efficiency is a relationship between ends and means. When we call a situation inefficient, we are claiming that we could achieve the desired ends with less means, or that the means employed could produce more of the ends desired. Less and more in this context necessarily refer to less and more value. Thus, economic efficiency is measured not by the relationship between the physical quantities of ends and means, but by the relationship between the value of the ends and the value of the means.

Employee and Management Owned Firms

Margaret Thatcher started a world trend during her tenure as Prime Minister is Downing Street. It is called: Privatization. It consisted of the transfer of control of a state-owned enterprise to the Private Sector.

Employee Benefits and Ownership

Aligning the interests of management and shareholders in the West by issuing stock options to the former - has failed miserably. Options are frequently re-priced in line with the decline in share prices, thus denuding them of their main incentive.

Entrepreneurship and Workaholism

The Dutch proudly point to their current rate of unemployment at less than 2%. Labour force participation is at a historically high 74% (although in potential man-hour terms it stands at 62%).

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