Microeconomics - Basics - 1224 Words

Economics Firm: Organisation that brings together FOP (land, labour, capital, entrepreneurship) to product goods and services for sale Industry: group of firms that produce a single g/s (or related) Explicit costs: payment made to outside suppliers of inputs e.g. salaries/wages, raw material, overhead costs implicit costs: do not involve direct payment of money, sacrifice of some alternative e.g. salary forgone/interest forgone (factors are already owned by firm) accounting cost: explicit cost economic costs → opportunity cost to society (explicit + implicit costs) traditional objective = profit maximization profit = revenues – cost. Non traditional objectives - received decent dividend - maximize†¦show more content†¦of sales - Lower packaging cost per unit FINANCIAL Raising funds - Easier and cheaper - Banks charge lower interest rates larger loans due to better credit ratings Public limited companies - Can raise capital more easily thr issues of shares/debentures to public - Public has more confidence in large firms → hold their shares RISK BEARING Insurable risks - theft, fire. Probability of occurrence can be calculated and insured against non- insurable risks - Cannot be insured against - E.g. changes in dd conditions for final product, changes in supply of in puts - Definite advantage - Can diversify output or develop new export markets when dd fluctuates - If supply shock, materials can be obtained from diff. sources to guard against events e.g. crop failures - Better position to compensate an area of loss with other areas of gain → higher chances of survival RD - Afford to build labs and employShow MoreRelatedThe Basic Principles Of Microeconomics1007 Words   |  5 Pagesevery one of us is touched by and take part in, the ten principles of microeconomics can be seen all throughout our lives. Each time we decide to go to a party rather than study, arrive on time to work in fear of being reprimanded, or decide to paint your house to increase its value, you are demonstrating one or multiple of these basic principles. Principle One: The fact that every decision contains a trade-off is not only a basic economic principle, but a fact of life, true on societal level andRead MoreMicroeconomics Basic Concepts1055 Words   |  5 Pages1. Introduction Basic Concepts 1.1 Economics Economics is a study of how people choose to allocate their scares resources to produce, exchange and consume goods and services to satisfy unlimited wants. As in this article, fuel surcharges increases as the price of fuel increases. Economics is also a study of choices made by individuals, firms, governments and society as a whole which helps us to understand economic issues that we read and hear about. In this article, people have a choice whetherRead MoreLearning the Basic Principles and Concepts of Microeconomics: A Response631 Words   |  2 PagesI feel that I have learned a lot in this course, and understanding these basic principles of microeconomics has changed the way that I view everyday activities and transactions. 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With the studyRead MoreComparative Study on Consumption Patterns of Soft Drinks and Fruit Juices846 Words   |  4 Pagestherefore become more health conscious thus leading to increase in demand of juices. Market Research is based on some underlying parameters like: †¢ Changing consumption pattern †¢ Health factor †¢ Status consciousness †¢ Varying lifestyle The basic subject matter of the research, comparative analysis of Soft Drinks and Juices is focused to study the mind/taste of different age group of people. The study starts with determining the major players in the soft drinks and the juices market, theirRead 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. You must cite at least three scholarly sources within the context of your work and cite your references according to APARead MoreEconomics in Todays Society1075 Words   |  5 PagesEconomics is defined as the study of how the forces of supply and demand allocate scarce resources. Economics can be subdivided into microeconomics, which examines the behavior of firms, consumers and the role of government; and macro economics, which looks at inflation, unemployment, industrial production, and the role of government (Investor Word, 2008). Economics can be further divided to include positive economics and normative economics. Positive economics is the study of what is, and how theRead MoreEconomics and the Effects on Our Society Essay962 Words   |  4 Pagesbranches that effect our society and the significance each plays within our lives today. 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In a YouTube video titled â€Å"AP Econ Music Video Microeconomics SPHA†, a group of teenagers worked on a musicRead MoreHow I Use Economic in My Daily Life?592 Words   |  3 Pageslike Nestle, Milo, food varieties are all high in quality and also price. I usually buy the same product but produced in a lower price such as Tesco products. For me the quality is as good as the famous brands but it’s cheaper in price. A basic principle in economics is the concept of opportunity cost. Economic theory would evaluate the pros and cons of going with any of these decisions. In other words, it would show you what youd be giving up and gaining with each. By purchasing a product