ECON 1116 Lecture 1: Microeconomics

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ECON 1116 Lecture-1:MICROECONOMICS
MICROECONOMICS
TIP: Read Wall Street Journal
Recently we observe that the stock market is falling and investors are selling stocks
and investing “safer” by buying gold and 10year treasury bonds
There has been a decrease in the oil prices due to failing Chinese markets
Chinese markets are failing because their economy is slowing down and hence they
need to produce less and they need less oil to run their factories.
Oil prices fall whenever the demand decreases and the supply increases
However, Friday saw an increase in the oil price due to tension in the strait of hormuz
leading to a decrease in the supply and increase in demand
The price of a commodity depends on the changes in supply.
Decrease in supply leads to an increase in the price and vice versa
The stock of a company is positively correlated to the growth of the economy
If the growth of the economy has slowed down the capacity to invest decreases on a
micro level.
Macroeconomics deals with how a policy affects the economy on a macro level
Microeconomics deals with how a policy affects a business
With the supply and demand curves a business can plan the supply required and
forecast the demand for the supply
Above equilibrium there is surplus supply and decrease in demand
Below equilibrium there is surplus demand and decrease in demand
At equilibrium supply=demand
In a business the aim is to always obtain marginal revenue=marginal cost
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Document Summary

Recently we observe that the stock market is falling and investors are selling stocks. Microeconomics and investing safer by buying gold and 10year treasury bonds. There has been a decrease in the oil prices due to failing chinese markets. Chinese markets are failing because their economy is slowing down and hence they need to produce less and they need less oil to run their factories. Oil prices fall whenever the demand decreases and the supply increases. However, friday saw an increase in the oil price due to tension in the strait of hormuz leading to a decrease in the supply and increase in demand. The price of a commodity depends on the changes in supply. Decrease in supply leads to an increase in the price and vice versa. The stock of a company is positively correlated to the growth of the economy. If the growth of the economy has slowed down the capacity to invest decreases on a micro level.

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