Discover the fundamentals of microeconomics and its applications in understanding economic behavior. This concise guide explores the microeconomic approach, its historical development from household management to political economy, and key concepts such as market structures, oligopoly, and equilibrium equations. Learn how microeconomics analyzes individual economic units, their interactions, and the role of the state in shaping economic rules. Understand the different types of equations used in microeconomics, including definition, behavior, and equilibrium equations, and how they help predict future economic outcomes. Dive into the world of microeconomics and gain insights into the complex relationships between economic agents, market structures, and the overall economy.
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[...] What is microeconomics, and what is it for? Basic textbook in microeconomics: "La microéconomie en schémas" L'Haridon et Darmon, 2021 general framework of the model weather = real facts that we observe and try to use to make future predictions. Model with parameters and laws of evolution of the system (causality) ? complexity because of the infinite degrees of freedom of the system Depending on the retained modeling, we can obtain different results In reality, there is no truth, we only reason on possibilities and probabilities However : reduce the number of possibilities based on relevant observations Scientific approach: 2 modes of reasoning : ? [...]
[...] different types of variables: y=f(x)=ax+b ? explanatory variable = x ? explained variable = y ? transformation function = f ? parameters : a (slope) and b (y-intercept) ? hypothesis = assumption, framework of reasoning. Behavior equation; ex: an economic agent seeks to satisfy its needs ? definition = always true (in a specific context). [...]
[...] The definition can change according to the context) ? result = Equilibrium equation : true only in a particular situation. Depends on definitions and behaviors; Ex : revenues = expenses / quantities what's it for market structure: oligopoly few sellers who have power over a large number of buyers) oligopoly market = model that will be defined relative to another model i.e. we will characterize an oligopoly by the model of more precise competition namely pure and perfect competition (we will tend towards a model of oligopolistic competition) Oligopoly = generalization of a duopoly sellers) Competition by quantities (Cournot model) or by prices (Bertrand model) Understanding marketing strategies ? [...]
[...] Political Economy (state administration) A.Smith transposes the model of Domestic Economy to Political Economy BUT there are differences between family and nation: ? the State has the capacity to influence political and economic rules ? capacity to 'beat money' (=monetary creation) reasoning at the microeconomic level=reasoning at the level of individuals (e.g. global demand=sum of individual demands) Model: define the conditions of choice of individuals then evaluation of consequences ? fundamental role of the market seen as an efficient mode of coordination (=how individuals negotiate with each other) (study the consequences of the sum of individual demands) PRE-REQUISITES: ? [...]
