Microeconomics: Key Concepts and Economic Methodology
This document covers essential ... Show more
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6 Apr 2023
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El
@wls.065
Microeconomics: Key Concepts and Economic Methodology
This document covers essential ... Show more
This page delves into the concepts of demand and price elasticity, crucial components of microeconomic theory. It provides a comprehensive explanation of demand, factors affecting demand, and the law of demand.
The page begins by defining demand as the quantity of goods or services that consumers are able and willing to buy at a given price during a specific period. It emphasizes the inverse relationship between price and quantity demanded, known as the law of demand.
Definition: The law of demand states that there's an inverse relationship between price and quantity demanded, ceteris paribus .
Factors affecting demand are listed, including population, income, related goods, advertising, tastes/fashion, expectations, and seasons. The page explains how changes in these factors can cause shifts in the demand curve.
Highlight: Movements along the demand curve are caused by changes in price, while shifts of the entire curve are caused by changes in other factors affecting demand.
The concept of price elasticity of demand is introduced, defined as the responsiveness of change in quantity demanded to a change in price. The page provides a formula for calculating PED and explains different types of elasticity:
Example: Air and water are given as examples of inelastic goods because they have no substitutes.
Factors influencing PED are discussed, including the number of substitutes, percentage of income spent, whether the good is a luxury or necessity, addictive or habitual consumption, and time period.
Vocabulary: A Giffen good is defined as a low-income, inferior good where demand increases as price increases.
This page covers income elasticity of demand , cross elasticity of demand , and the concept of supply in microeconomics. These concepts are crucial for understanding market dynamics and consumer behavior.
The page begins by defining income elasticity of demand as the responsiveness of demand to changes in consumer income. It explains how YED can be used to classify goods:
Example: Television sets are given as an example of a luxury good with YED > 1.
Cross elasticity of demand is introduced as the responsiveness of demand for one product to changes in the price of another product. The page explains how XED can be used to identify relationships between goods:
Highlight: The strength of the relationship between goods can be determined by the magnitude of XED.
The concept of supply is defined as the quantity of goods or services that a firm is able and willing to supply at a given price during a specific period. The law of supply, which states that price and quantity supplied are in a direct relationship, is explained.
Definition: The law of supply states that there is a direct relationship between price and quantity supplied.
Factors causing shifts in supply are listed, including productivity, technology, indirect taxes, subsidies, number of firms, weather, and costs of production. The page emphasizes that changes in price cause movements along the supply curve, while changes in other factors cause shifts of the entire curve.
Vocabulary: Profit incentive is highlighted as a key factor in the upward slope of the supply curve.
This final page focuses on the concept of price elasticity of supply , an important aspect of microeconomic analysis. It provides a brief overview of PES and its implications for market dynamics.
The page defines price elasticity of supply as the responsiveness of quantity supplied to a change in price. It provides the formula for calculating PES:
PES = % Change in Quantity Supplied / % Change in Price
Definition: Price elasticity of supply measures how responsive the quantity supplied is to a change in price.
The page notes that PES is always likely to be positive, reflecting the direct relationship between price and quantity supplied as described by the law of supply.
Highlight: Unlike price elasticity of demand, which is typically negative, price elasticity of supply is usually positive due to the profit incentive for firms.
The concept of perfectly inelastic supply is briefly mentioned, where PES = 0. This represents a situation where supply remains constant regardless of price changes.
Example: While not explicitly stated in the text, an example of a good with perfectly inelastic supply in the short run might be tickets to a sold-out concert, where the quantity cannot be increased regardless of price increases.
Although the page is brief, it provides a foundation for understanding how supply responds to price changes, which is crucial for analyzing market behavior and predicting outcomes in various economic scenarios.
This page introduces fundamental concepts in economic methodology and the economic problem of scarcity. It covers positive and normative statements, needs versus wants, and the basic economic problem.
The page begins by distinguishing between positive and normative statements in economics. Positive statements are objective and based on facts, while normative statements are subjective and based on value judgments.
Definition: Positive statements are objective and can be tested, while normative statements are based on opinions and value judgments.
The concept of scarcity is introduced as the fundamental economic problem. Resources are limited, but human wants are unlimited, necessitating choices in resource allocation.
Highlight: The basic economic problem is defined as unlimited wants but limited resources, requiring efficient resource allocation.
The page also covers the factors of production and their respective rewards . It explains how different economic systems address the basic economic questions of what to produce, how to produce, and for whom to produce.
Example: North Korea is given as an example of a planned economy where the government controls economic decisions.
The Production Possibility Frontier is introduced as a tool to illustrate scarcity, efficiency, opportunity cost, and gains from trade. The PPF shows the maximum potential output of an economy using two goods or services when all resources are fully and efficiently employed.
Vocabulary: Opportunity cost is defined as the cost of the next best alternative forgone when a choice is made.
App Store
Google Play
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
El
@wls.065
Microeconomics: Key Concepts and Economic Methodology
This document covers essential microeconomics concepts, including economic methodology, scarcity, production possibility frontiers, demand and supply, and elasticity. It's an invaluable resource for students studying AQA A Level Microeconomics.
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This page delves into the concepts of demand and price elasticity, crucial components of microeconomic theory. It provides a comprehensive explanation of demand, factors affecting demand, and the law of demand.
The page begins by defining demand as the quantity of goods or services that consumers are able and willing to buy at a given price during a specific period. It emphasizes the inverse relationship between price and quantity demanded, known as the law of demand.
Definition: The law of demand states that there's an inverse relationship between price and quantity demanded, ceteris paribus .
Factors affecting demand are listed, including population, income, related goods, advertising, tastes/fashion, expectations, and seasons. The page explains how changes in these factors can cause shifts in the demand curve.
Highlight: Movements along the demand curve are caused by changes in price, while shifts of the entire curve are caused by changes in other factors affecting demand.
The concept of price elasticity of demand is introduced, defined as the responsiveness of change in quantity demanded to a change in price. The page provides a formula for calculating PED and explains different types of elasticity:
Example: Air and water are given as examples of inelastic goods because they have no substitutes.
Factors influencing PED are discussed, including the number of substitutes, percentage of income spent, whether the good is a luxury or necessity, addictive or habitual consumption, and time period.
Vocabulary: A Giffen good is defined as a low-income, inferior good where demand increases as price increases.
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
This page covers income elasticity of demand , cross elasticity of demand , and the concept of supply in microeconomics. These concepts are crucial for understanding market dynamics and consumer behavior.
The page begins by defining income elasticity of demand as the responsiveness of demand to changes in consumer income. It explains how YED can be used to classify goods:
Example: Television sets are given as an example of a luxury good with YED > 1.
Cross elasticity of demand is introduced as the responsiveness of demand for one product to changes in the price of another product. The page explains how XED can be used to identify relationships between goods:
Highlight: The strength of the relationship between goods can be determined by the magnitude of XED.
The concept of supply is defined as the quantity of goods or services that a firm is able and willing to supply at a given price during a specific period. The law of supply, which states that price and quantity supplied are in a direct relationship, is explained.
Definition: The law of supply states that there is a direct relationship between price and quantity supplied.
Factors causing shifts in supply are listed, including productivity, technology, indirect taxes, subsidies, number of firms, weather, and costs of production. The page emphasizes that changes in price cause movements along the supply curve, while changes in other factors cause shifts of the entire curve.
Vocabulary: Profit incentive is highlighted as a key factor in the upward slope of the supply curve.
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
This final page focuses on the concept of price elasticity of supply , an important aspect of microeconomic analysis. It provides a brief overview of PES and its implications for market dynamics.
The page defines price elasticity of supply as the responsiveness of quantity supplied to a change in price. It provides the formula for calculating PES:
PES = % Change in Quantity Supplied / % Change in Price
Definition: Price elasticity of supply measures how responsive the quantity supplied is to a change in price.
The page notes that PES is always likely to be positive, reflecting the direct relationship between price and quantity supplied as described by the law of supply.
Highlight: Unlike price elasticity of demand, which is typically negative, price elasticity of supply is usually positive due to the profit incentive for firms.
The concept of perfectly inelastic supply is briefly mentioned, where PES = 0. This represents a situation where supply remains constant regardless of price changes.
Example: While not explicitly stated in the text, an example of a good with perfectly inelastic supply in the short run might be tickets to a sold-out concert, where the quantity cannot be increased regardless of price increases.
Although the page is brief, it provides a foundation for understanding how supply responds to price changes, which is crucial for analyzing market behavior and predicting outcomes in various economic scenarios.
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
This page introduces fundamental concepts in economic methodology and the economic problem of scarcity. It covers positive and normative statements, needs versus wants, and the basic economic problem.
The page begins by distinguishing between positive and normative statements in economics. Positive statements are objective and based on facts, while normative statements are subjective and based on value judgments.
Definition: Positive statements are objective and can be tested, while normative statements are based on opinions and value judgments.
The concept of scarcity is introduced as the fundamental economic problem. Resources are limited, but human wants are unlimited, necessitating choices in resource allocation.
Highlight: The basic economic problem is defined as unlimited wants but limited resources, requiring efficient resource allocation.
The page also covers the factors of production and their respective rewards . It explains how different economic systems address the basic economic questions of what to produce, how to produce, and for whom to produce.
Example: North Korea is given as an example of a planned economy where the government controls economic decisions.
The Production Possibility Frontier is introduced as a tool to illustrate scarcity, efficiency, opportunity cost, and gains from trade. The PPF shows the maximum potential output of an economy using two goods or services when all resources are fully and efficiently employed.
Vocabulary: Opportunity cost is defined as the cost of the next best alternative forgone when a choice is made.
App Store
Google Play
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user