A.

LESSON PROPER:
MICROECONOMICS AND ITS THEORIES & 
AND MARKET STRUCTURE

TOPIC # 1
WHAT IS MICROECONOMICS ITS OBJECTIVE / GOALS :

            Microeconomics is a branch of Economics that studies individuals, households and

firms' behavior in decision making regarding allocation of scarce resources. Generally it applies
to markets of goods and services and deals with individual and economic issues

The objectives of Microeconomics : 

a) to analyze the market mechanisms that establish relative prices on goods and services
b) to allocate limited resources among alternative uses
c) to analyzes market failure, where markets fail to produce efficient results. 
The major goal of Microeconomics POLICY is efficiency, equity and growth

What is the importance of studying micro economics

a)   Helps us study and understand the practical working of the economy
and facilitates better understanding of the economic system
b)   Microeconomics helps in studying the conditions of economic welfare. 
c)   To help us know and understand the standard of living and the condition of welfare 
           of the people. 
d)   Not only to study their condition of welfare but we can also analyse the factors that 
           determine their welfare as well. 
            e)  It also helps economists identify the allocation of resources within the  economy.
                       and helps control the use of the allocated resources as well.
            f)  Microeconomics ensures to understand the implications and problems of 
                      taxation and formulate suitable taxation policies.
How will Microeconomics affects individuals and firms?
We decide on how to use our limited resources to maximize personal satisfaction. We
calculate, we do budget because it cannot buy everything we want.
The business firm likewise have limited funds, time and resources. The have to make
decisions on how to budget their time, money & resources.
Microeconomics include supply, demand, competition, and the prices of items.

            TOPIC # 2
          THE THEORIES OF MICROECONOMICS
1. Theory of Consumer Demand
                ThIs theory relates goods and services consumption preference to consumption 
                     expenditure. This relationship provides a way for consumers, subject to budget 
                    constraints, to achieve a balance between expenses and preferences by optimizing utility.

2. Theory of Production Input Value 

                This theory states that the price of an object or condition is determined by the sum of 
                the cost of the resources that went into making it. 
                   The cost of production or processing  ( labor, capital, land ), taxes & others.
                    
 3.  Production Theory
                   The production theory explains how businesses decide on the quantity of raw material to 
                    be used and the quantity of items to be produced and sold. It defines a relationship 
                    between the quantity of the commodities and production factors on the one hand, and 
                    the price of the commodities and production factors on the other.

4. Theory of Opportunity Cost

             The opportunity cost theory, the value of the next best alternative available is the 
              opportunity cost. It depends entirely on the valuation of the next best option and not on 
              the number of options.
                 The opportunity cost is the value of the one given-up between alternatives.

 Most people have a limited amount of time and money. They cannot buy or do everything they
want, so they make calculated microeconomic decisions on how to use limited resources to
maximize personal satisfaction. Similarly, a business also has limited time and money.
Businesses also make decisions that result in the best outcome for the business which may be
to maximize profit. 

(B)
QUESTIONS FOR REVIEW:
1. Discuss and give situational examples of the Theory of Opportunity Cost.
2. Why do we need to study Microeconomics?
3. Compare and contrast the theories of microeconomics.

(C)
OTHER REQUIRED READINGS
Other required reading for your quizzes, research/assignments and oral
recitation, you may read any books on Microeconomics.. 
  * Microeconomics( 5 edition) _Edwin Dolan; David Lindsey
th

  * Introductory Macroeconomics ( Revised edition ) – Pagoso, Dinio, Villasis

(D)
SECONDARY RESOURCES
To know more about this module you may explore you.tube.com video on
Microeconomics

( E. ) 
ASSESSMENT AND ANNOUNCEMENTS Please take note that our quiz will be on ______.
You will be assessed  through online quiz, random recitation on our live  lecture classes on
____