Wednesday, February 4, 2009

Microeconomics

Well, the new class started today. It's a 5 week course in the Microeconomics. As far as I can understand from the first session it's all about Supply and Demand - fairly simple "common sense" concepts. I don't know about that though. It seems that these concepts have a large number of different variables that affect the curves in the most unpredictable way.

Or maybe I am wrong. Maybe it is very simple, and I am just being freaked-out by how most people would cringe every time Economics comes up as a subject. Granted, I do not believe this class is designed to teach heavy duty economists, so there may be a lot less formulas (formulae) comparing to the undergraduate course for those trying to achieve a Business Undergraduate degree.

I shall address these concerns as I would encounter them. Here's 10 basic principle of the economy as they are taught in the class. The reason I am typing them out is that maybe I'll remember them better :)

#1 There is always a trade-off between equity and efficiency
#2 There is always an opportunity cost
#3 Most of the decisions are not all or nothing but are made base on marginal changes
#4 People respond to intensives
#5 Trade makes everyone better off
#6 Markets are usually a good way to organize economics
#7 When markets fail public policy can increase efficiency
#8 Society's standard of living is based on it's ability to provide goods and services
#9 Prices rise when the government prints too much money (inflation)
#10 Society faces a short-run tradeoff between inflation and unemployment

Pretty common sense isn't it? But most of the time people don't even think about these things and plow through.

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