in modern economics in general and in the lecture notes in particular. Rubinstein Ariel, Lecture Notes in Microeconomics (modeling the economic agent). The lecture notes are from one of the Discussion sections for the course. D2, The basics of supply and demand (PDF), Demand and supply curves (chapter 2). 𝗣𝗗𝗙 | Economics class sizes are shrinking at most universities, and at some at the desk apparently minding my own business, reading and making notes.
|Language:||English, Spanish, Arabic|
|ePub File Size:||17.70 MB|
|PDF File Size:||19.20 MB|
|Distribution:||Free* [*Regsitration Required]|
These notes are prepared for the Microeconomic courses I teach at the Clearly, the notes are far from being complete and cannot compensate for reading. Notes on Microeconomic Theory ver: Aug. 3 The Traditional Approach to Consumer Theory. Basics of Preference Relations. MICROECONOMICS NOTES (EC). Department of Economics. Midlands State University. LEVEL: FIRST SEMESTER OF FIRST LEVEL.
Suraj Baral. In the words of Prof. Monopoly and monopsony PDF. How to distribute the commodities and services among the different sections of the society? Samuelson, There is really no opposition between microeconomics and macroeconomics.
Only material things are considered: However, the services are immaterial but they still play a vital role to promote human welfare.
Robbins held the view that those services that have some exchange value must also be included in the study of economics. He has ignored those who live outside the society and by doing so; he has narrowed the scope of economics.
This definition makes the study of economics subjective: Different people may think differently about different goods as far as welfare is concerned. It creates confusion: Since the same activity at one point of time be measured in terms of money and at another time without money. Marshalls definition is highly classificated: Economics as a Science of Choice Making: Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative use.
The following are the important aspects of definition given by Robbins 1 Human wants are unlimited: One has to choose between more urgent and less urgent want. That is why the economics is a science of choice making. The economics is neutral between ends. Robbins has considered the problem of scarcity of resources but some times problem also arise because of abundance of resources. Robbins has not given any solution to this problem. Though Robbins does not use the word welfare in his definition but it is implied in it since optimization of gains is aimed to increase welfare.
Robbins talks of allocation of resources but without a growth of resources human wants in the future will not be fulfilled. Robbins has totally ignored this aspect. Robbins has enlarged the scope of economics too much by including in it all problems where choice is concerned.
Economics as a Science of Dynamic Growth and Development: Samuelson has defined economics as follows: Economics is the study of how men and society choose with or without the use of money to employ scarce productive resources which could have alternative uses to produce various commodities over a period of time and distribute them for consumption now and in the future amongst various people and groups in society.
Samuelson agrees with Robbins that economics should deal with scarce resources and unlimited ends.
So that it optimizes the gains. Samuelson however argues that the resources are not static and they can be made to grow over time through exploration, exploitation and development. According to Samuelson the growth of resources is necessary since not only the present wants of human beings should be considered but also the increasing wants of increasing number of people should be taken in to consideration. Like Robbins Samuelson includes all activities in economics whether they can be measured in terms of money or not or whether they lead to material welfare or not.
Best General Definition of Economics: Economics as a science: Economics is a science because it uses scientific methods in its researches and investigations.
As every science economics also has a unit of measurement that is money; the economist can measure the individual and business motives with the use of this measuring rod of money. Though the economics has an inability to predict the future course of events as accurately as accurately as the laws of the physical sciences like physics and chemistry can. But for this reason the scientific nature of economics can not be denied.
The reason for this lack of accuracy is that economics deals with highly complex and variable forces. It deals with men who have freedom of will and there is no guarantee that they will act in a preconceived manner. Economics as an art: Economics is an art too. Economics as a science make laws, rules and doctrines and as an art it tell how to use these laws rules and doctrines for the maximum satisfaction of human beings.
Economics- Positive Science or Normative Science The old English Classical School of Economics held that Economics was purely a positive science while the Historical School of Germany held the contrary view that the economics is a normative science.
Economics as a positive science: Economics as a positive science is concerned with the criteria of, what is?
And not to the criteria of what ought to be? Economics must study things as they are. Economics must be neutral between ends. Economics does not discuss the moral rightness or wrongness of the thing. An economist should not give value judgments or ethical advices.
Economics as a normative science: Economics as a normative science is concerned with the criteria of what ought to be? It has no objection to discussing the moral rightness or wrongness of the thing. An economist is also a human and lives in the same society and knows that the rules framed by him are used for this society so he can not abstain himself from giving value judgments. Methods of Economic Study Since Economics is a science, it also adopts certain methods for the discovery and formulation of its laws and principles.
There are two methods 1. Deductive Method: This method descends from general to particular. Under deductive method conclusions are drawn on the basis of certain fundamental truths. Law of demand and law of supply are based on deduction. Steps or stages of Deduction: Perception of problem. Making assumptions. Formulating hypothesis.
Testing or verifying the hypothesis. Inductive Method: This method mounts from particular to general. Induction is a process in which facts are collected, arranged and then general conclusions are drawn.
Steps or stages of Induction: Perception of the problem. Collection, classification and analysis of data using appropriate statistical technique. Finding out the reason of relationship existing. Setting up rules and general laws. Microeconomics and Macroeconomics. These terms were first used by Prof. Ragnar Frisch of Oslo University. Micro Economics: Microeconomics may be defined as that branch of economic analysis which studies the economic behavior of the individual unit, may be a person, a particular household, or a particular firm.
It is a study of one particular unit rather than all the units combined together. In microeconomics we examine the trees not the forest. Since microeconomics splits up the entire economy into smaller parts for the purpose of intensive study, it is sometimes referred to as the Slicing Method.
Scope of Microeconomics: Theory of product with its two constituents, namely, the theory of consumers behavior and the theory of production and costs.
Theory of factor pricing with its four constituent, namely, the theories of wages, rent, interest and profit. Theory of Economic Welfare.
Microeconomics is sometimes referred to as Price Theory, the reason being that prices are the main part of microeconomics.
Macro Economics: Macroeconomics may be defined as that branch of economic analysis which studies the behavior of not one particular unit, but of all the units combined together.
Macroeconomics is the study of aggregates; hence, it is also called Aggregative Economics.
It is the study of the overall conditions of an economy, say, total production, total consumption, total savings, and total investment. Theory of Income, Output and Employment with its two constituents, namely, the theory of consumption function and the theory of investment function.
Theory of Prices with its constituents of theory of inflation, deflation and reflation. Theory of economic growth. Interdependence of Microeconomics and Macroeconomics: In fact, they are so interdependent that neither approach is complete without the other. In the words of Prof. Samuelson, There is really no opposition between microeconomics and macroeconomics.
Both are absolutely vital. You are less than half educated if you understand the one while being ignorant of the other. Lecture Notes. Lecture notes files. Need help getting started? Don't show me this again Welcome! The basics of supply and demand PDF. Elasticities of demand PDF. Price elasticity of supply; consumer preferences PDF. Optimization, revealed preference, and deriving individual demand PDF.
Substitution and income effects, individual and market demand, consumer surplus PDF. Irish potato famine, network externalities, and uncertainty PDF. Preference toward risk, risk premium, indifference curves, and reducing risk PDF. Insurance and production function PDF.
Production functions PDF. Production functions and cost of production PDF. Cost functions PDF. The cost of production and profit maximization PDF. Short run and long run supply PDF.
Long run supply and the analysis of competitive markets PDF. Supply restrictions, tax, and subsidy PDF. Tax, subsidy, and general equilibrium PDF. Efficiency in exchange, equity and efficiency, and efficiency in production PDF.
Production possibilities frontier and output market efficiency PDF.
Why markets fail PDF. Monopoly PDF. Monopoly and monopsony PDF. Monopoly and monopsony cont.