CMA复习笔记（四）
Microeconomic
Demand
Determinants: consumer income, prices of related goods, consumer expectations, consumer tastes and preferences, number of consumers.
Elasticity= (Q2-Q1)/ [(Q2+Q1)/2]/ (P2-P1)/[(P2+P1)/2] Perfectly inelastic=0; inelastic<1;unitary elasticity=1; elastic>1
Items influence the demand elasticity: luxury or necessity, percentage of consumer income, number of substitutes, time period considered.
Utility theory
The benefit derived by an individual from a product or service.
Principle of diminishing marginal utility states that equal increments of additional consumption of a good will result in successive reductions in the incremental utility received by the consumer.
Indifference curves: reflect consumers’ preferences; and budget constraints reflect consumers’ real income.
Elastic>1 VS. Price increase -> Total revenue decreases
Cross-elasticity of demand -> Positive=substitute or Negative=complementary goods; 0=unrelated
Income elasticity: Positive=normal goods; Negative= inferior; 0= no change
Supply
Determinants: production prices, number of firms, prices of complementary and substitute goods, price expectations, taxes and subsidies, changes in technology
Items influence the price elasticity: cost of storage, production process, time
Marginal resource cost: MRP=MRC
Minimizing costs: marginal product of labor/price of labor = marginal product of capital/ price of capital
Maximizing profits: marginal revenue product/price of labor = marginal resource cost/ price of capital
Economies of scale: when average costs of production tend to decline as firms expand their output. Increase in the size of markets lead to production advantages associated with greater size.
