As factors of production, supply and demand of labor, land and capital will determine how much the producer will get out of this process. This process occurs in different stages. In the earlier or higher stages, producers' goods must be produce

14. Interest Rates and Course Review

Feb 12th, 2010

The time market determines the pure rate of interest. Price per unit of time may be wages or rent. The interest income will be earned by the capitalist who has assumed the task of advancing present money. The capitalist then waits for five year

13. The Labor Market

Feb 12th, 2010

Economists can say little about population and its size, despite the gloomy views of Malthus. More people are a good thing because of the division of labor. Living standards are higher when populations are higher. Living standards are higher wh

12. Labor and Unions

Feb 12th, 2010

In order for anyone to make ethical judgments, he must know the consequences of his various actions. In questions of union actions displacement or unemployment for oneself or others will be considered unfortunate by most people. Once understood

10. Government Cartels

Feb 11th, 2010

The only cartels that have lasted have been government cartels. There is no essential difference between a cartel and an ordinary corporation or partnership. Not even the De Beers cartel is all powerful. The South African government nationalize

7. Mid-Term Review and The Theory of the Firm

Feb 11th, 2010

The objective of the corporate firm is to maximize profits and avoid losses - the same objective of the free market. But the costs are paid out before the income comes in. Stockholders will sell stock to shake up the managers. Government firms

5. Minimum Price Controls

Feb 11th, 2010

Thou shalt not sell a certain product or service below a certain price, e.g. wheat, cotton, corn, cheese, sugar. This will result in an artificial unsold permanent surplus, as it does in the American farm situation. Initially resources are attr

4. Price Controls in the Oil Industry

Feb 11th, 2010

The disappearance of oil has been forecast every decade. Prices were overlooked. When the price is high it is more profitable to look for oil. Total reserves on the ground are higher than they were in 1890. Treating demand as a fixed quantity,

6. Government Licensing of Industry and Minimum Wage

Feb 11th, 2010

The peanut butter crunch was in 1980. Crop acreage and production was cut down by 45% by government price support, import quotas, and cartelizing of the industry. The price of peanuts more than tripled. Farm price supports also keep cheese pric

9. Monopoly and Competition

Feb 11th, 2010

The words monopoly and competition have been changed. Competition meant rivalry or competing, either active or potential. Businesses do not like this. Monopoly meant a grant of privilege by the government. It now means a falling demand curve.

8. The Firm

Feb 11th, 2010

Business men must make sure they can cover their costs by incoming revenue. The production function will yield a certain quantity of a product. The firm considers marginal costs and average costs to weigh where along the demand curve production

3. The Determination of Prices

Jan 22nd, 2010

Price is determined by the equilibrium price and the equilibrium quantity. If your good is not selling, you lower the price. If your goods fly off the shelves you are selling too cheaply and you raise prices. Demand changes constantly, e.g. the

1. Intro to Micro: Demand and Supply

Jan 21st, 2010

Microeconomics is concerned with the actions of individuals. The focus of macroeconomics is entire sectors of the economy. All good macro will have micro foundations because those economic sectors are made up of individuals, each using scarce m

2. Value

Jan 21st, 2010

Why is it that things like bread and water which have high use values are cheap while on the other hand luxury items like diamonds are very expensive? This paradox was not solved until it became understood that people choose only a marginal uni

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