Microeconomics

Elasticity

The concept of elasticity in Economics
In this website, which I created, you will find the meaning of price elasticity as well as some other concepts of elasticity, the measurement of price elasticity of demand and some examples where you can see how the concept is applied.

Opportunity cost

The concept of Opportunity cost.
In this website you will find discussion on increasing and constant opportunity cost and a video-clip explaining why increasing opportunity cost occurs. The Examples section contains two links pertaining to application of opportunity cost.

The Seen and the Unseen:The Costly Mistake of Ignoring Opportunity Cost
Following the narrative style of Frederic Bastiat, the author in this article shows how there are "seen" and "unseen" effects of economic policies undertaken, the unseen effects meaning "opportunity cost". The author points out how we ignore "opportunity cost" when we try to stop "outsourcing" (migration of jobs from high wage to low wage areas of the world).

Market Equilibrium

Shift vs movement along the Demand Curve and Shift vs Movement along Supply Curve : It is important to understand the difference between a shift in the demand/supply curve and a movement along the demand/supply curve. What are some factors that bring about a shift?

Changes in demand and supply with Interactive graph : Click on the graphs and observe the change. Enjoy the dynamics of the illustration.

Market Distortions

Water Price Rising Worldwide: Water is increasingly becoming the new scarce resource. As a result price of water is rising worldwide. Yet free and formal water markets hardly exist. In countires across the world, water is a subsidized commodity. Subsidies result in inoptimal use of resource in the supply of water, overuse and non-conservation of water by industries farmers and households.

Decision Making

Virtual Farm Game: This is a game where students run a virtual farming operation for 10 years. In the process, they make various decisions regarding what to produce, how to produce and how to respond to the shocks that appear on the market. Try this out. Are you making any marginal analysis?

Market Structures

Profit Maximization under Perfect Competition: Where does a perfectly competitive firm decide to produce? Click on any "price" (assumed to be set by the market) and observe how "output" is determined. Enjoy the dynamics of the illustration.

Monopoly This is a short article on Monopoly including discussion on "natural monopoly" , the case against monopoly, some examples of monopoly and antitrust law.

Explore Monopoly: Here is a small exercise that might help you understand the concept of total and marginal revenue as well as the monopolist's equilibrium price and output.

Market Failure

Market Failure In general markets are efficient and lead to optimal solutions. However, In some cases, the market equilibrium is not the most desirable or optimal outcome. There are divergences between private and social cost that leads to this result. These are cases of market failure. This piece gives some examples..

Public Goods and Externalities
Need for government intervention is often based on public goods and in presence of externalites. The autihor discusses several examples, explains the nature of the problem and solutions.

This site is created by Dr Satarupa Das
Contact: sdas@nvcc.edu
Copyright 2006
Last Update: May 10, 2007

Acknowledgements: I am very grateful for the gracious permissions to use portraits from "Warren J. Samuels Portrait Collection" of Duke University, Milton Friedman's photograph from Free to Choose Media and Ronald Coase's photograph from The University of Chicago Law School. The photograph of Simon Kuznets is obtained with generous permission from Collection of University of Pennsylvania Archives.