Microeconomics is the study of the choices that individuals and businesses make and the way these choices respond to incentives, interact, and are influenced by government. Microeconomics involves the analysis of how consumers make decisions about what to consume, how firms decide what and how much to produce, and how the interactions of consumers and firms determine how much of a good will be sold, and at what price. Many interesting questions can be approached by applying the methodology developed. For example, how will a cut in price of V3 Motorola hand – phone affect the quantities of these items that people buying?
It is the standard approach of microeconomics, although not without controversy, to assume that consumers seek to maximize satisfaction and firms seek to maximize profits. The mechanism through which consumers and firms interact with each other is the market. Microeconomics analyzes the determination of market demand and supply, various forms of market structures, and how they affect economic efficiency.
As what you’ve read above, the economic choices that individuals, businesses, and the governments make and the interactions of those choices answer the three major questions that microeconomics focus.
To give an idea the type of questions that microeconomics deals with; let’s start with a simple example. Consider some of the important decisions a firm, says Dell Computer, needs to make.
First, Dell needs to decide what kind of computers to produce: the processor, hard disk capacity, RAM, modem, CD-ROM, installed software, monitor, etc.
The Research paper on The Motivational Reasons behind Consumer Choice in Branded Coffee Shops Abstract
The coffee-shop industry has been undergoing substantial change during the latter part of the twentieth and early part of the twenty-first century, reflected by continuous changes in consumer behaviour. The aim of this study is to improve the understanding of the motivational reasons behind customer choice in branded coffee shops, both international and local. A quantitative data collection of 300 ...
Second, Dell needs to decide how to produce the computers: in one location or in different locations; equipment and technologies to use; make or purchase choices, etc.
What may determine Dell’s production decision: consumer demand; technological feasibility; costs of production; products of other computer producers? and so on
Third, Dell needs to decide how to price its computers. This again will depend on things such as consumer demand and production costs, as well as on the prices of competitors.
Now, these decisions are not unique to Dell. Other computer producers will face the similar types of decision problems. In fact, almost all business firms need to make decisions regarding what to produce, how to produce and for whom they’ll produce.
What?
What goods and services get produced and in what quantities?
Goods and services are the objects that people value and produce to satisfy human wants. The nation’s farms, factories, construction sites, shops, and offices produce array of goods and services that range from necessities such as food, house, and apartment to leisure items such as ocean cruise, SUVs, and DVD players. The vast array of goods and services produced into four lager groups:
* Consumption goods and services: are goods and services that are bought by individuals and used to provide personal enjoyment and contribute to a person’s standard of living. Example: housing, SUVs, movies, chocolate bars…
* Investment goods are goods that are bought by businesses to increase their productive resources. Example: auto assembly lines and shopping malls, airplanes…
* Government goods and services are items that are bought by governments: missiles, weapons systems, travel services…
* Export goods and services are items produced in one country and sold in other countries. Example: US export goods and service include the airplanes produced by Boeing that Singapore Airline buys…
What determines the quantities of corn we grow, homes we build, and DVD players we produce? How do these quantities change over time? And how are they affected by ongoing changes in technology that make an ever – wider array of goods and services available to us? All of these questions should be answered by studying microeconomics.
The Research paper on Computers Personality Services For Computer
Olu Tau-Deen Jr. 12/2/04 Professor Jones Research Paper Computers are already giving people today access to large amounts of information. This is increasing our brain power, like a hot air balloon it increases our brain power. As computers become more powerful they will grow more intelligent. Some people think that someday computer and machines will be smarter than people. In 5 to 20 years there ...
How?
How are goods and services produced? Let’s look around and you’ll see many examples of the same jobs being done in different ways. In some supermarkets, checkout clerks key in prices. In others, they use laser scanner. One architect draw his designed ideas by using paper and pencil while another use personal computer in helping exploit them.
Goods and services are produced by using productive resources, which is called factors of production. They are:
* Land: is all the “gift of nature” that we use to produce goods and services. It’s called natural resources, includes land in every sense, minerals, energy, water, air, wild plants, animals, birds, and fish… Some of these resources are renewable, and some are nonrenewable.
* Labor is the work time and work effort that people devote to producing goods and services. It includes the physical and mental efforts of all the people who work on farms and construction sites and in factories, shops, and offices. The quantity of labor increase as the adult population increase and a larger percentage of the population take jobs. The quality of labor depends on human capital, which means the knowledge and skill that people obtain from education, on the job training, and work experience.
* Capital consists of the tools, instrument, machines, buildings, and other constructions that they have been produced in the past and now that use to produce goods and services. Example: hammers and screwdrivers, computers, auto assembly lines, office towers and warehouses, dams and power plants, airport and airplanes, and cookie shops.
* Entrepreneurship is the human resource that organizes labor, land, and capital. Entrepreneurships come up with new ideas about what and how to produce, make business decisions, and bear the risks that arise from these decisions.
For whom?
For whom are goods and services produced?
The Review on Consumer buying preferences towards technological goods produced using sustainable business practices
1. Abstract This report shows data on consumer behaviour as primary research and secondary data from literature about sustainability, sustainable business practices and consumer behaviour towards sustainable produced goods. The terms sustainability and sustainable business practices will be examined in more detail. Data gathered from primary research will help to get a better understanding on ...
The answer for this question depends on the incomes that people earn and the prices they pay for the goods and services they buy. At a given prices, a person who has high income is able to buy more goods and services than a person who has lower income. For example, the directors earn much higher incomes than do accounting assistants or workers. So, directors get more of the goods and services produced than accounting assistants and workers.
People earn their incomes by selling the services of the factors of production they own. Rent is paid for the use of land, wages are paid for the services of labor, interest is paid for the use of capital, and entrepreneur receive a profit (or loss) for running their business
There is a lot of income inequality throughout the world. Men, on average, earn more than women. College graduates, on average, earn more than high school graduates.
Microeconomics explains how the economic choices that individuals, businesses, and governments make the interactions of those choices end up determining what, how, and for whom goods and services get produced.
