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Complete Economics Summary with all Key Concepts
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ECONOMIC PRINCIPLES IN A GLOBAL ERASCOPE OF ECONOMICS
Maeroeconomics -
Whole Economy
Microeconomics -
Individuals , Finns
Economic Agent -
Decision Maker (Group , Individual)
Scare Resources -
Supply < Demand #rare #externality
OPTIMISATION
Making the best Chain possible with information
given
Opportunity Cost -
Alternative Benefit
# Cost Benefit Analysis
-
Optimistin in Levels -
different Options
incurniy different Costs #highest net benefit
Marginal Analysis -
Difference between Options #Companion of change
EQUILIBRIUM
State of total Optimistin
Free Rider -
using Benefit
without incurring Cost
DEMAND AND SHPPLV
#Market Price
perfectly Competitive market -
Sellers have identical products sold for the market price,
,
ho Individual has power to influence the market free entry,
Market Demand Curve -
Sum of individual Demand Curves
Demand Curve Swifts -
Preferences, Wealth Availability Price future Expeditions
, , ,
Market Snpply Curve -
Relationship between Supply and Market Price
,DEMAND, SHPPLV AND EQUILIBRIUM
Competitive Equilibrium -
Competitive Equilibrium Price , Competitive Equilibrium Quantity
Excess Demand -
Storage D >S
Excess Supply -
Swplus S > D # Supply Flexibility
CONSKMERS AND INCENTIVES
The Bayer's Problem -
Preferences Market Price ,
, Budget
Consumer Swplus -
Difference between Market Price and Wikingness to
pay
Consumer Equilibrium Condition -
¥-1 M¥3 =
# marginal Benefit #Price
DEMAND ELASTKITY
Elasticity -
Sensitinfy of the
Charge of a Value
elastic Ep > 1
, perfectly elastic Ep = an
,
Unit elastic {
☐
= 1
,
indastic {
☐
< 1
,
perfectty inelastic {
☐
=
0
Price Elasticity of Demand -
Demand Changedneto Price Grange
AQ III
{ =
☐
ApI
Cross Price Elasticify of Demand
-
-
Demand Charge due to Price Charge of on other Product
AQ III
EDA Ap[I
=
Income Elasticit/ of Demand Demand due to home
Charge Charge
-
,
AQ [% ]
EI =
AII
, SELLERS AND INCENTNES
The Setter's Problem -
Production Method Production Cost ,
Market Price
Production -
Input →
Output
Short Rum -
# inflexib.IE#ACvftoutpntlevd # AW
Long Rum-
#flexible # ALF #DC
Q
Short Rum Production Function
/
-
W
Production Cost
Output Q Total Cost ( =
Cvtcrtc , # imphcit /opportunity Cost Te
Employees W
AverageTotal Cost Cio ATC
Marginal Product Qm MQ
Average Fixed Cost (
*
= AFC
cv.io?-AvcFixedCostC+-T-c Average Variable Cost
Variable Cost Cv VC
¥ Marginal Cost (m =
Mc
" " "
af GE
" ""
QMMQ („ j
"
Q W (v (F C ( (m
1 1 1 1 25 26 1 25 26 26
101 2 100 100 25 125 0.99 0.24 1.23 1.25
|
P
¥: RmD=Rm
C (m Demand Supply Q (m
-
÷
c
(m „
=
„„ =
(„ a MTEMC
: ,
-
Q Total Revenue R =p ✗ Q
|
Marginal Revenue RMMR Total Cost ( =
Cui Q
Price p
P Profit P =
R -
( =
(p cm ) Q
-
✗
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