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Lecture 1 - Axioms - Basic Concepts and Axioms Lecture 1...

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Basic Concepts and Axioms Lecture 1 Econ 100.2 Introduction to Microeconomic Theory and Policy Assad Baunto 1 st semester, SY 2011-12
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Basic Concepts and Axioms – Lecture 1 Allocation of Resources: Consumers: maximise preference subject to a limited resources (e.g. budget) Producers: maximise profits subject to limited resources (e.g. capital, labour--skills) 2
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Basic Concepts and Axioms – Lecture 1 A market is where buyers and sellers come together and interact to determine prices and exchange some products, goods, services and assets. e.g. commodities, stocks and bonds, housing, labour/job What about marriage??? What about local conflicts??? 3
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Basic Concepts and Axioms – Lecture 1 Market types based on the number of players: 4 Market Type Sellers Buyers Products Monopoly Competitive Oligopoly Monopolistic One Many Few (2<x<∞)Man y Many Many Many Many -- Homogenous -- Heterogenous Monopsony Oligopsony Many Many One Few (2<x<∞) -- --
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Basic Concepts and Axioms – Lecture 1 Market Equilibrium: D = S --key element is Adam Smith’s “invisible hand” =
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