{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ch01-1 - Microeconomics 2nd Edition David Besanko and...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Microeconomics, 2 Microeconomics, 2       nd nd  Edition  Edition David Besanko and Ronald Braeutigam David Besanko and Ronald Braeutigam Chapter 1:  Analyzing Economic Problems Chapter 1:  Analyzing Economic Problems
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 Microeconomics is the study of the economic behavior of  individual economic decision-makers such as consumers,  workers, firms or managers.  This study involves both the  behavior of these economic agents on their own and the way  their behavior interacts to form larger units, such as markets.
Background image of page 2
3 Example: The Railroad Industry in the US        74.9% of all freight, 1929        39.8% of all freight, 1970 1970’s: poor profits, bankruptcies, inability to invest 1980’s: loosened regulation and union rules            improved profitability
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4 Analysis of this issue requires Microeconomic tools.  Who  are the actors who need to know something about  Microeconomics? Policy Makers Managers Union Leaders Lenders…and beyond!
Background image of page 4
5 1. Models are simplifications…like maps Resemble reality Understandable Appropriate scale
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
6 Example:   World-wide market for unprocessed  coffee beans, December, 1997   Price per pound Quantity, pounds Supply (P,W)
Background image of page 6
7 Example:   World-wide market for unprocessed  coffee beans, December, 1997   Price per pound Quantity, pounds Supply (P,W) Demand (P,I)
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
8 2. Elements of Models Specifying the Choices/Alternatives
Background image of page 8
9 Definition : The  Opportunity Cost  of a resource is the value  of that resource in its best alternative use. Example:   $100 in facilities yields $800                          Revenue                $100 in R&D yields $1000 revenue   Opportunity cost of investing in facilities =                 $1000       Opportunity cost if investing in R&D = $800 Note Opportunity cost depends on how we specify  alternatives.     
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}