Micro and Macro Economics
explanatory Essay
569 words
Economics is basically the understanding of how different economies function. Economics is the study of how to best allocate scarce resources among competing uses. Scarcity in the economy is the main problem. There are not enough resources to keep up with the demand for them. Within the discipline of economics, there are two areas of study: Micro and Macro Economics.
Microeconomics is the study of an individual economy, or of the different segments within the larger economy, while macroeconomics is the study of aggregate economic behavior, or the economy as a whole(Madura 103). The main goal of macroeconomics is to determine the impact of consumer spending on total output, employment, and prices.
To fully understand economics as a whole, we must understand that there are limitations set by the available resources that are used to produce goods and services. These resources that are used in the manufacturization of goods and services are called factors of production. Land, labor, capital, and entrepreneurship. Land is the place used to produce the goods. Not only the physical land, but also resources such as oil, air, and water. “Labor refers not only to the number of people on the workforce, but the quality of the workers in the workforce (Mandura 115)”. Capital, the third factor of production refers to the goods used in further production. And finally, entrepreneurship is defined as the assembling of resources to produce new products.
A major area of concern among economists is opportunity costs. Opportunity costs are the products that are given up for another product. Because we have a limited amount of resources, we must find the most efficient way to use them. Production possibilities are the alternative combinations of all final goods and services that can be produced in a given time period with all available resources and technology.
The main objective of economist is to maintain maximum output in production. In order to reach maximum efficiency, there are three questions that economists have to address. What to produce? Who are we going to produce these goods for? And, how are we going to produce it? All of these questions were answered by Adam Smith, a famous economist. Smith believes that there is such a thing as an “invisible hand” of economics that acts as the decider to all the basic three economic questions (Group Presentation).
In this essay, the author
- Explains that economics is the study of how to best allocate scarce resources among competing uses.
- Explains that microeconomics is the study of an individual economy, or of the different segments within the larger economy. the macroeconomic goal is to determine the impact of consumer spending on total output, employment, and prices.
- Explains that economics is limited by the available resources that are used to produce goods and services. land, labor, capital, and entrepreneurship are the factors of production.
- Explains that opportunity costs are the products that are given up for another product. production possibilities are alternative combinations of all final goods and services that can be produced in a given time period.
- Explains that the main objective of economists is to maintain maximum output in production. smith believes that there is an invisible hand of economics that acts as the decider to all the basic three economic questions.
- Explains that there are many opportunities for jobs, for those with an economic degree. the average starting salary for an economist starts around $27,000, which is not as good at the salaries of marketing and accounting.
Related
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- Economics: Demand and Quantity Demandedargumentative essayIt is the study of resource allocation, distribution and consumption, of capital and investment, and of the management of the factors of production. (http://wikitionary.org/wiki/economics)
In this essay, the author
- Explains that they will distinguish demand and quantity demanded by stating the differences between both terminologies.
- Explains that economics is the study of resource allocation, distribution and consumption, capital and investment, and management of the factors of production.
- Illustrates the law of demand in the graph. as the price increases, the quantity demanded decreases to 10, but increases to 18, 26, 38, and 53.
- Analyzes how the taste and preferences of consumers constantly change due to what they see, their age plus education. with the knowledge that they take in their everyday life, it shapes a different feeling or thinking.
- Explains that some consumers have this thing of knowing what is going to happen to the prices in the future. this is not where the consumer consider themselves as a shrink or fortune teller.
- Explains that in a country or state or region, there will be changes in the population, such as an increase or decrease due to the birth rate and death rate.
- Explains that there are two types of goods: complementary goods and substitutes goods.
- Predicts that with the introduction of new taxes, especially taxes for goods bought, the demand will decrease. the curve will shift to the left.
- Explains that the law of demand states that if everything remains constant when the price is high the lower the quantity demanded.
- Explains that quantity demanded is associated with the movement along the demand curve. the curve is downward sloping from left to right as it shows the law of demand.
- Explains that the higher the income, the more things consumers will buy. this applies to normal goods but not for inferior goods, such as coca-cola bottles imported from usa.
- Explains that demand is where the price is not the factor which will shift the demand curve to the left or right.
1410 wordsRead More - Managerial Economics Essayexplanatory essayManagerial economics fits into the topics discussed because this is an area that gives explanation on how resources such as money, technology, land, and labor. It looks on how all these resources should be allocated in a more efficient manner. By understanding managerial economics it is possible to make the right decision regarding all the above topics. The managers have the ability to apply managerial economics to make strategies and solve critical business problems (Rowe,
In this essay, the author
- Explains mcdonald's has different structures which makes it management more effective. these are the same structures that spear company limited has adopted.
- Explains that the chain of command is clear and short. it has narrow control spans, high level centralization, formalization and specialization.
- Explains that this structure works well in a company since it deals with different types of clothes. its disadvantage is that it can be hard to scale and at times the company ends up duplicating resources.
- Explains the structure in the company that is based on the end to end flow of wide range of processes such as order fulfillment, research and development, and customer acquisition.
- Explains that spear company limited has achieved great success because the managers have applied effective leadership.
- Explains that the managers in the company have been able to install high level discipline among the employees. they act as good role models to employees when it comes to matters of discipline.
- Explains that the company's leadership has provided a clear vision, and all employees are encouraged to adhere to it to help it achieve its overall goals.
- Explains that the management understands the importance of tactical planning in helping the company achieve its goals. employees and other stakeholders are encouraged to offer their input during the planning and execution planning.
- Explains that the company management has invested heavily in monitoring and evaluation systems that have helped it attain most of the goals set.
- Explains that the top management has been in the forefront in giving the right support to other employees. this includes on job training, incentives, rewards, promotions, and other support needed to help the company achieve its goals.
- Explains how spear company limited has come up with ethical programs that are geared towards ensuring that the company attains its goals and instills high level discipline in it.
- Explains that a code of ethics is available for all employees and other stakeholders in the company to adhere to.
- Explains that social responsibility is another aspect that is integrated in the ethical program of the company.
- Explains that annual training ensures that all employees and stakeholders are updated on changes in their ethical behaviors and continue to behave ethically for the good of the company and the community in general.
- Explains that fairness is one of the ethical practices promoted by the company. it is observed in recruitment and selection, purchasing policy, pricing and in all other areas.
- Explains that every company must take risks to succeed. risks mean that the company has the chance of not getting the return desired for the investment made.
- Describes the risks that the company has taken by operating within the clothing and fashion business for a specific period according to the strategic plan set.
- Explains the risks associated with adhering to legislative or regulatory requirements in the business operations. there are some regulations that might not work for the company.
- Explains that a company's biggest risk is the way it handles its finances. it involves customers giving credit, the duration, and those who bring more funds to the company.
- Explains that operational risks do not bring in return like financial or strategic risks. these include company internal processes, system or people failures.
- Describes beatty, quinn, et al. strategic command taking the long view for organizational success. leadership in action.
- Analyzes how mcdonalds's management has incorporated managerial economics in its operation. spear company limited has borrowed a lot of its managerial issues from mcdonald’s.
- Explains the importance of managerial economics in managing risks and achieving competitive advantage.
- Describes jolly, a., rowe, w.g. (2001). managing business risk: a practical guide to protecting your business.
1924 wordsRead More - Macro Economy Essayexplanatory essayInflation, Unemployment, and the Federal Reserve System An economy is a robust set of inter-related production and consumption activities that assist in the determination of the scarcity and surplus of goods and services. For instance, when there is an overproduction and the demand for the goods is low, economist refers this to as a surplus in the goods. However, if the need for the same products is higher than the production, then this is termed as a scarcity of the goods. In some cases the supply and demand of goods and service may be the same; this is referred to as the state of equilibrium.
In this essay, the author
- Explains that an economy is a robust set of inter-related production and consumption activities that assist in the determination of the scarcity and surplus of goods and services.
- Explains that the real gross domestic product is a close approximation of the total amount spent by individuals.
- Explains that aggregate supply and demand are measures of macro economy that show the relationship between states’ general price levels and the quantity of goods supplied and demanded by the suppliers and consumers.
- Explains that the federal reserve system is an independent body capable of making its decision without any ratification from the president.
1174 wordsRead More - Macroeconomics: Should Minimum Wage Be Raised?analytical essayMacroeconomics is the study of the behavior of an economy at the aggregate level. Macroeconomics considers the industrial sector, the services sector or the farm sector, but not specific parts of any of these sectors. The factor studies might include inflation, unemployment, and industrial production, often with the focus the effect of government policy on these factors.
In this essay, the author
- Explains macroeconomics is the study of the behavior of an economy at the aggregate level. it considers the industrial sector, the services sector or the farm sector but not specific parts of these sectors.
- Analyzes businessweek's article titled making the economic case for more than the minimum wage, written by peter coy.
- Opines that the minimum wage has been on political agendas and debated for a number of years. a poll in the washington post in december 2013 found that two-thirds of americans do in fact support an increase.
- Analyzes how the free market conservatives argue that it's wrong for government to interfere with work contracts. they believe that labor laws distort the market.
- Explains that the article points out that setting the price of labor above equilibrium level causes supply to exceed demand and will lead to more unemployment.
- Explains that the article talked about the card-krueger study, which showed that higher wages reduce turnover and increase job satisfaction. there is a cost to business with turnover.
- Opines that the article makes reference to 17 million workers being directly affected, and 11 million with indirect benefit, about probable raises to preserve pay ladders.
- Questions whether we believe in a minimum wage, or is it political gamesmanship? the subminimum is accepted for handicapped workers and restaurant workers.
- Opines that raising a minimum wage isn't good for raising and supporting families, since minimums are the base of life.
- Analyzes how the article addressed two approaches to lessen the influence of minimum wage. the good was to increase business and economic growth which would create a greater demand for workers.
809 wordsRead More - Monetary Policyexplanatory essayThe Economy is the backbone to society. There are many factors that operate in, and govern our society’s economical structure. Factors such as scarcity and choice, opportunity cost, marginal analysis, microeconomics, macroeconomics, factors of production, production possibilities, law of increasing opportunity cost, economic systems, circular flow model, money, and economic costs and profits all contribute to what is known as the economy. These properties as well as a few others, work together to influence the economy. Microeconomics and Macroeconomics are two major components. Both of these are broken down into several different components that dictate societal norms and views.
In this essay, the author
- Explains that monetary policy is one of the tools a national government uses to influence its economy.
- Explains that the economy experienced neither significant unemployment nor inflation between 1996 and 2000, but that wishful thinking ended in march 2001. since 1970, real gdp has declined in five periods.
- Explains that the u.s. economy has weakened considerably since the federal reserve board submitted its previous monetary policy report to the congress.
- Cites university of phoenix's mmpbl-501 web site. economics for managerial decision making.
- Explains that the economy is the backbone of society. there are many factors that operate in, and govern our society's economic structure.
- Explains the effects of monetary policy on the unemployment rate, gdp gap, and okun’s law. economists disagree about the effectiveness of the policy, especially its effectiveness in the long run.
- Explains that a monetary policy that persistently attempts to keep short-term real rates low will lead to higher inflation and higher nominal interest rates, with no permanent increases in the growth of output or decreases in unemployment.
- Explains how changes in real interest rates affect the public's demand for goods and services by altering borrowing costs, availability of bank loans, wealth of households, and foreign exchange rates.
- Explains that easy monetary policy may be inflationary if initial equilibrium is at or near full-employment.
- Explains that money is created by single commercial banks, banking system, and the federal reserve bank system.
1670 wordsRead More - Microeconomics Reflectionanalytical essayWhat is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails.
In this essay, the author
- Explains that microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources.
- Analyzes how the definition of microeconomics was presented at a high level, and how it correlated to their everyday life. professor julie pelia assigned them topics that engaged their minds.
- Explains the two types of economic systems that a society adheres to: the command system and communism.
- Explains the market system, or capitalism, is a privately owned economic system based on markets and price. it is exercised in the united states.
- Explains that supply and demand are arguably the most fundamental concepts of economics and is the backbone of a market economy.
- Explains that oil companies are able to increase their price at will, and the consumer still purchases is due to the elasticity of the industry.
- Analyzes the impact of the philadelphia tax hike on beverages with sugar, which was implemented to reduce the amount of people drinking sugary drinks.
- Explains that philadelphia's neighboring counties allow residents to avoid the beverage tax, which in turn hurts the supermarkets/local stores and ultimately resulted in layoffs and businesses closing due to the decline in sales.
- Explains that a federal tax system consists of two types of tax systems: the progressive system and the flat tax system.
- Explains that wages are the monetary compensation paid by an employer to an employee in exchange for work done.
- Opines that microeconomics on a large scale can be complex, but when you dive deeper into what it involves any and everyone can build some sort of coloration to their everyday lives.
1401 wordsRead More - Macroeconomic Objectives Essayexplanatory essayMacroeconomics is the study of the economy as a whole, which looks at economic growth, unemployment and inflation. (Dobson and Palfreman, 1999) Government macroeconomics objectives can dividend into
In this essay, the author
- Explains that the economy tends to move from boom to recession, and it is difficult for government to maintain and achieve macroeconomic objectives.
- Explains that macroeconomics is the study of the economy as a whole, which looks at economic growth, unemployment, and inflation.
- Explains the four main objectives of macroeconomic policy: long-term growth of the economy, low and stable inflation, a low level of unemployment rate, and balance the current account.
- Explains the four objectives of government macroeconomics objectives: raise standard of living, protect the environment, improve productivity, and ensure sound government finances.
- Explains that it is difficult for government to achieve all the macroeconomics objectives at the same time. a policy irritating aggregate demand may reduce unemployment in the short term but launch a period of higher inflation
- Explains that a health economic growth and low rate of inflation are important to achieve.
- Explains that in a growing economy, consumers spend more on foreign goods than domestic goods, which leads to deteriorating trade deficit and disequilibrium in the balance of payments.
- Opines that a health economic growth and equal distribution of income and wealth is one of the conflicts between macroeconomic objectives.
- Opines that healthy economic growth and a good environment require infrastructure, which may construct roads, public transport, airports, etc. there are also costs associated with growth.
- Explains the trade-off between a low rate of inflation and low unemployment.
- Explains that a balance in the current account may lead to high inflation, which will reduce the competitiveness of the economy.
- Describes the benefits of higher employment and a good and sustainable environment.
- Explains that government cannot achieve all these main and additional objectives at the same time. fiscal policy, monetary policy and supply-side policy solve the conflicts between macroeconomic objectives.
- Explains that the government's fiscal stance indicates whether it is trying to expand the economy that is to increase employment or to reduce the likely level of inflation.
- Explains that government can influence the economy by using monetary policy to control inflation and unemployment. if there is a rise in interest rates, it reduces inflationary pressure, but it leads to lower growth in output.
- Explains supply-side policy, which aims at improving the efficient supply of goods and services. it can effect on the rate of economic growth, inflation, unemployment and current account.
- Opines that supply-side policy minimizes the conflicts between economic growth and low inflation by allowing a higher level of aggregate demand, but will not affect the general price level.
- Explains that fiscal and monetary policies can help to minimize the conflicts between low unemployment and low inflation. fiscal policy has its initial impact in the goods markets, then
- Explains that in every economy, there are 4 main and 4 additional objectives of government macroeconomics objectives. they point out that the objectives have their own conflicts which difficult to carry out at the same time.
- Opines that government should consider the importance of the government macroeconomic objectives goals and which governments should priority first. this will be an easier way for government to allocate resources.
1754 wordsRead More - Intel Corporation And The Effects Of Economicsexplanatory essayEconomics is defined as is the social science that studies the production, distribution, and consumption of goods and services. It primarily deals with the exchange of value and that labor or human effort is the source of all value. The field may be divided in other ways, most commonly microeconomics vs. macroeconomics. Microeconomics examines the economic behavior of individual units, including businesses and households, and their interactions through markets, given scarcity and government regulation. Macroeconomics examines an economy as a whole "top down" with a view to understanding interactions between the broadest aggregates such as national income and output, employment and inflation and broad aggregates like total consumption and investment spending. Econometrics is the application of statistical techniques to measuring economic phenomena.
In this essay, the author
- Explains that economics is the social science that studies the production, distribution, and consumption of goods and services. microeconomics examines the economic behavior of individual units and their interactions through markets.
- Explains that the concept of value is central to economics. it is the going rate of exchange between buyers and sellers in a market.
- Explains porter 5 forces analysis, a framework for business management developed by michael porter in 1979.
- Explains market structure or market form, which describes the state of a market with respect to competition.
- Explains that intel is the world's largest semiconductor company and the leading manufacturer of the x86 series of microprocessors, the processor found in many personal computers.
- Explains that intel had competition from big names such as samsung, texas instruments, toshiba, stmicroelectronics and advanced micro devices. intel managed relationships with three classes of players: competitors, buyers and suppliers.
854 wordsRead More - The Role of Economics in Sportsexplanatory essayEconomics is the study of how best to allocate scarce resources throughout an entire market. Economics affect our lives on a daily basis, whether it is on a business level or a personal level.
In this essay, the author
- Opines that sports are one of the most profitable industries in the world. the economics involved with sports has drastically changed over the last ten years.
- Explains that sports has undergone a whole new renovation in the past few decades. it isn't just an activity that is played for fun.
- Explains that economics is the study of how best to allocate scarce resources throughout an entire market. sports have become a business entity rather than an entertainment industry due to the strong economic impression of the overall industry.
- Explains that sport is a business, which relies heavily on the involvement of society, and business within to be successful. there are several areas and economic factors that must be taken in to consideration when looking at the outstanding success of sports
- Explains that economics is the study of how best to allocate scarce resources among competing uses. it is concerned with the production and use of goods and services.
- Explains the limits of technical knowledge, productive resources available, organizational patterns, behavior, and law imposed by social custom and more. the ability of an economy to satisfy the gals of its members within the constraints set by these constraints depends on efficiency.
- Explains that scarcity creates the necessity of making choices among alternatives, which is one of the central themes of economics.
- Explains that most behavioral situations involve play. workers compete for higher paying positions, groups of individuals form teams (firms) and compete against other teams for consumers' dollars.
- Explains that sporting events qualify as play, but the importance of play as fundamental economic behavior changes this perspective. sports become an arena of pure economic activity.
- Explains that the pga has a unique pay structure when it comes to athletes. many critics in the past said that this structure was going to fold.
- Opines that finchem admits that competing for the sports dollar long-term is much more challenging now than it was five years ago.
- Explains that only the top players in each individual tournament receive pay and there happened to be different players almost every time. last years only six of the 326 players on the pga tour money list-made more than $1 million.
- Explains that there are a few economic problems within the sports industry. one major problem is called competitive imbalance.
- Explains that competitive imbalance is an economic problem because a team can't afford to pay the big dollars required to sign star players. this is evident in baseball, where the top 20 percent of major league teams won an average of 93.7 games.
- Explains that attendance in all four major sports has gone down over the past few years due to more sports programming available on free or cable television. however, ticket prices are too high.
- Explains that the minnesota twins' payroll for this year is only around $18 million, so it is almost impossible for them to compete with teams like the new york yankees who's payroll is around $75 million.
- Opines that to solve competitive imbalances, there must be higher revenue sharing and luxury taxes for teams with payrolls over a certain amount. to solve the problem of falling attendance, the obvious answer is to lower ticket prices.
- Explains that sports is a profitable industry and that sponsorship is profitable for both the sponsors and the team.
- Explains that merchandising is another way to make a profit in sports. it includes everything from clothing and apparel to books and video games.
- Explains the third way to make a profit in sports is through broadcasting rights. television and radio networks pay to have the rights to broadcast certain teams, which benefits both the team and the broadcaster.
- Explains how the new york yankees made a lot of money from their 93 million dollar contract with adidas. they also made over $20 million from yankee merchandise sales.
- Explains that sport can be a very profitable industry for sponsors, merchandisers, and television broadcasters and for professional teams.
- Explains that television has been the primary way that sports fans can gather information about their favorite sports. the neilsen ratings tell how popular the program is and how many people are watching it.
- Explains that the decline in popularity of watching sports on tv began in 1994. baseball was in the midst of one of the greatest seasons it had in a long time. the expos were dominating baseball with an amazing record.
- Explains that the strike lasted into the march of 1995, canceling the world series for the first time since 1903. the fans were not as forgiving as the teams expected.
- Explains that baseball had resurgence in popularity in 1998, when the all-star game came around, there were two players who had the opportunity to break the single season home run record.
- Analyzes how the super bowl, nba finals, and world series will be affected by a decrease in advertising.
- Explains how the nba's biggest star, michael jordan, had much to do with its success. with his presence, tv ratings skyrocketed.
- Explains that when dealing with college sports tv ratings, people can easily get confused. local stations will continue to show local college coverage, but large stations such as nbc and cbs will cover big names.
- Opines that if there were a decrease in tv ratings, it probably wouldn't affect the fans and their perspective of college sports.
- Opines that the trend of a decrease in ratings in the long run can hurt the sports industry not so much on the college level, but in professional level sports.
- Explains that in sports, management is responsible for the success of individual organizations and leagues or associations, and disseminates rules and regulations to individuals to ensure smooth transition from loss to profit.
- Explains that in sport, there are several types of labor costs, which discourage a manager from making an easy logical decision to make an economic business decision.
- Explains that player's salaries are the largest expense which organizations have to deal with. the increase in profits is due to the structure of the negotiations processes for each league.
- Explains that travel costs are another large cost for teams to incur. the nba will cost less to travel than the nhl, and there are also coaches, equipment, trainers and sometimes family.
- Explains that a team must also factor in game day expenses, such as field maintenance, security, ushers, facility management, and facility rental fees.
- Explains that player development is a key tool in professional sports. the nhl, mlb, and mls all have minor league systems, which they fund.
- Explains that the average administrative cost per team is approximately $3 million. without the players, there would be no need for an administrative team.
- Explains how management offsets costs and turns them into profits, and how corporate sponsorships, partnerships, mergers with other businesses and media generate new revenues for professional sports.
- Explains that the average media revenue is anywhere from $7 million in tv contracts and $8.5 to $13.4 million per team for national media. the dallas cowboys logo sells far more than the cincinnati bengal's.
- Explains that ticket sales generate 25.9% of baseball revenues, 18.3% in the nba, 16% in nfl, and 22.3% of nhl average revenues. media generates 20.7% of all sports revenue, while stadium revenues are minimal.
5002 wordsRead More - What Is Managerial Economics?explanatory essayAccording to McGutgan and Moyer: “Managerial economics is the application of economic theory and methodology to decision-making problems faced by both public and private institutions”. McNair and Meriam: “Managerial economics consists of the use of economic modes of thought to analyze business situations”. Spencer and Siegelman: Managerial economics is “the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management”. Haynes, Mote and Paul: “Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm’s decision-making process”.
In this essay, the author
- Explains that managerial economics provides a logical and experiential framework for analyzing the question such as "what or how much should i produce, and for whom?", or "should i try to retail or whole sale?"
- Explains that managerial decisions are an important component in achieving the objectives of the organization.
- Explains that managerial economics encompasses all the problems and areas of management and a firm. decision-making, forecasting, demand analysis, capital management, and profit management are considered.
- Explains that managerial economics is concerned with economic theory and tools of analysis, which are directly related in the process of decision-making.
1284 wordsRead More