Problems
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Tuesday, November 18, 2008
Economic Analysis
Hey everybody, here's a little helpful end of chapter story tidbit
Econ Analysis
Econ Analysis
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Wednesday, November 12, 2008
Trade & Specialization
Hey ladies & gentlemen, please refer to page 46 & 47 of the Subject Guide of 02 Intro to Econ, if you click on the image, it will open a new window and show in its full size, anyways, I have also embedded a video I uploaded to YouTube, if you have any questions, please feel free to leave a comment or send me an email.
Thursday, October 30, 2008
Some Key Terms For Ch 2 of the SG
Hey ladies & gentlemen, these are some terms where I just couldn't understand thus hampering my meaning (and that includes watching videos, link HERE)
So I will list the words that I didn't grasp fully or was confused about in certain contexts (e.g. I knew what these words meant in some context but not in others)
Source: HERE
1. Utility: measure of relative satisfaction from or desirability of consumption of various good & services. In plain English = A scale of (probably on a graph) of how much satisfaction we get from a goods & services (product)
2. Neoclassical economics: Old school economic concepts.
3. Rationality: An old school econ, oops, neoclassical economics concept. It is precisely defined in terms of imputed utility-maximizing behavior under economic constraints.
Plain English: people getting the maximum satisfaction out of their limited resources (remember the PPF!!! Always go back to the PPF), in other words they are on a point at the PPF, not under. If they are under the graphed line, then it is irrational behaviour.
4. Indifference Curve: plots the combination of commodities that an individual or a society requires to maintain a given level of satisfaction.
Plain English: Please leave a comment, on how to put this in plain English, LOL, cuz I don't know!
5. Ordinal utility: states that while the utility of a particular good and service cannot be measured using an objective scale, a consumer is capable of ranking different alternatives available.
Plain English: Basically it's how a customer rates how much one product over the other (remember the ~ indifferent to, and > prefers) using the scale system (like 1 to 5 or 1 to 10 or 4 stars, etc)
6. Cardinal utility: The magnitude of utility differences is treated as an ethically or behaviorally significant quantity. (Remember the SG, pg 69, Example 2)
Plain English: How much more does someone like A over B over C, etc.
7. Transitive: Noting a relation in which one element in relation to a second element and the second in relation to a third element implies the first element is in relation to the third element, as the relation “less than or equal to.”
Plain English: (Personally this word drove me the craziest as to what it meant). If there's product A & B, and if you prefer one over the other, then it's transitive, so you need 2 or more items for basis of comparison.
8. Complete: Of or pertaining to a set in which every fundamental sequence converges to an element of the set.
Plain English: (This also drove me crazy), it basically means when the comparisons are done, e.g. A > B > C, it is transitive because you're comparing and it's complete because you finished/concluded the comparison :)
I hope this was helpful, if you have any questions or see any mistakes please feel free to leave a comment and I'll correct them or if you have a simpler explanation, please leave a comment.
So I will list the words that I didn't grasp fully or was confused about in certain contexts (e.g. I knew what these words meant in some context but not in others)
Source: HERE
1. Utility: measure of relative satisfaction from or desirability of consumption of various good & services. In plain English = A scale of (probably on a graph) of how much satisfaction we get from a goods & services (product)
2. Neoclassical economics: Old school economic concepts.
3. Rationality: An old school econ, oops, neoclassical economics concept. It is precisely defined in terms of imputed utility-maximizing behavior under economic constraints.
Plain English: people getting the maximum satisfaction out of their limited resources (remember the PPF!!! Always go back to the PPF), in other words they are on a point at the PPF, not under. If they are under the graphed line, then it is irrational behaviour.
4. Indifference Curve: plots the combination of commodities that an individual or a society requires to maintain a given level of satisfaction.
Plain English: Please leave a comment, on how to put this in plain English, LOL, cuz I don't know!
5. Ordinal utility: states that while the utility of a particular good and service cannot be measured using an objective scale, a consumer is capable of ranking different alternatives available.
Plain English: Basically it's how a customer rates how much one product over the other (remember the ~ indifferent to, and > prefers) using the scale system (like 1 to 5 or 1 to 10 or 4 stars, etc)
6. Cardinal utility: The magnitude of utility differences is treated as an ethically or behaviorally significant quantity. (Remember the SG, pg 69, Example 2)
Plain English: How much more does someone like A over B over C, etc.
7. Transitive: Noting a relation in which one element in relation to a second element and the second in relation to a third element implies the first element is in relation to the third element, as the relation “less than or equal to.”
Plain English: (Personally this word drove me the craziest as to what it meant). If there's product A & B, and if you prefer one over the other, then it's transitive, so you need 2 or more items for basis of comparison.
8. Complete: Of or pertaining to a set in which every fundamental sequence converges to an element of the set.
Plain English: (This also drove me crazy), it basically means when the comparisons are done, e.g. A > B > C, it is transitive because you're comparing and it's complete because you finished/concluded the comparison :)
I hope this was helpful, if you have any questions or see any mistakes please feel free to leave a comment and I'll correct them or if you have a simpler explanation, please leave a comment.
My video for ya, Comparative, Absolute Advantage, how to figure Opportunity Cost
To download the Excel I use in this video, click HERE
If you still have any questions, please don't hesitate to leave a comment or feel free to email me or hit me up on Skype
If you still have any questions, please don't hesitate to leave a comment or feel free to email me or hit me up on Skype
Comparative Advantage Document and Video
Monday, October 27, 2008
Study Notes from Last Weekend
Page 62 to 67 of the SG, Chapter 2:
2. Rationality - This is a neo-classical economic concept (modern day vernacular would be Optimization or Utility), in a nutshell means Theory of Individual Behaviour and Motivation (Supply & Demand), so we can say this is a Micro Economic Concept, so for those of you not reading the main text, just read the chapter in other texts that talk about individual/household choices.
The word CONSTRAINT, once again shows up here, remember it's a fancy way of saying "LIMIT" in Economics. That means we could only (given there are 2 products) produce so many combinations of salads or pastas. IF it's our allowance/paycheck, then we can only buy so many combinations of pizza or sushi or pizza and beer :)
Rational in Economics term does not mean "NORMAL" and irrational in Economics does not mean "NOT NORMAL." In Economics, it just means we're not producing/spending at a point on the graph (Irrational) or we are producing/spending at a point on the graph (rational).
Page 63: Here the ability to produce increased, this can be because the wife hit him in the head or we just learned how to make salads & pasta faster (technological efficiency/improvement). When it comes to the pizza/sushi, pizza/beer combo, then it would mean we won the lottery, got a raise or changed jobs and got a bigger paycheck. So our individual rationality (the graph/curve) would change (see page 64 of the SG). When you become confused about this graph, just go back to the PPF, when production is not occurring at a point on the line of the graph, then you're not at maximum utilitzation, and if you're not at the point of the line of the individual rationality graph then you're being irrational.
Please refer to page 63: Inconsistency - This in economics term is not when an athlete has a great game one day and tanks it the next. This refers to our changes in taste or preferences :)
Page 65 - Preferences - This is to measure ranking of one product over another, not quantifying her satisfaction/pleasure. To express:
A > B = A is preferred to B
A ~ B = indifferent between A & B
Let's clear the misunderstanding of the word indifference here. It does not necessarily mean that you're indifferent (in the dictionary sense), it would mean that you don't have a preference of one item over another, or you like both equally the same.
e.g.
iPhone > all other cell phones = this means I prefer the iPhone over all other cell phones (unfortunately it's unavailable in South Korea)
Brand A Cell Phone ~ Brand B Cell Phone = I have no preference over any other brands of cell phones.
Let's rank this:
iPhone > Brand A Cell ~ Brand B Cell
I prefer the iPhone over Brand A Cell Phones & Brand B Cell Phones, but am indifferent to Brand A Cell between Brand B Cell.
Hope this was helpful.
One final note, only real numbers can be expressed here (good news for us at least mathematically)
2. Rationality - This is a neo-classical economic concept (modern day vernacular would be Optimization or Utility), in a nutshell means Theory of Individual Behaviour and Motivation (Supply & Demand), so we can say this is a Micro Economic Concept, so for those of you not reading the main text, just read the chapter in other texts that talk about individual/household choices.
The word CONSTRAINT, once again shows up here, remember it's a fancy way of saying "LIMIT" in Economics. That means we could only (given there are 2 products) produce so many combinations of salads or pastas. IF it's our allowance/paycheck, then we can only buy so many combinations of pizza or sushi or pizza and beer :)
Rational in Economics term does not mean "NORMAL" and irrational in Economics does not mean "NOT NORMAL." In Economics, it just means we're not producing/spending at a point on the graph (Irrational) or we are producing/spending at a point on the graph (rational).
Page 63: Here the ability to produce increased, this can be because the wife hit him in the head or we just learned how to make salads & pasta faster (technological efficiency/improvement). When it comes to the pizza/sushi, pizza/beer combo, then it would mean we won the lottery, got a raise or changed jobs and got a bigger paycheck. So our individual rationality (the graph/curve) would change (see page 64 of the SG). When you become confused about this graph, just go back to the PPF, when production is not occurring at a point on the line of the graph, then you're not at maximum utilitzation, and if you're not at the point of the line of the individual rationality graph then you're being irrational.
Please refer to page 63: Inconsistency - This in economics term is not when an athlete has a great game one day and tanks it the next. This refers to our changes in taste or preferences :)
Page 65 - Preferences - This is to measure ranking of one product over another, not quantifying her satisfaction/pleasure. To express:
A > B = A is preferred to B
A ~ B = indifferent between A & B
Let's clear the misunderstanding of the word indifference here. It does not necessarily mean that you're indifferent (in the dictionary sense), it would mean that you don't have a preference of one item over another, or you like both equally the same.
e.g.
iPhone > all other cell phones = this means I prefer the iPhone over all other cell phones (unfortunately it's unavailable in South Korea)
Brand A Cell Phone ~ Brand B Cell Phone = I have no preference over any other brands of cell phones.
Let's rank this:
iPhone > Brand A Cell ~ Brand B Cell
I prefer the iPhone over Brand A Cell Phones & Brand B Cell Phones, but am indifferent to Brand A Cell between Brand B Cell.
Hope this was helpful.
One final note, only real numbers can be expressed here (good news for us at least mathematically)
Thursday, October 23, 2008
Telephone interview with Paul Krugman (2008 Nobel Prize Winner for Economics)
Telephone interview with Paul Krugman recorded immediately after the announcement of the 2008 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 13 October 2008. The interviewer is Adam Smith, Editor-in-Chief of Nobelprize.org.
Monday, October 20, 2008
Optimization and Equilibrium, Supply and Demand Video Lecture
For those of you on Chapter 2 of the Study Guide, it discusses Optimization and Equilibrium, Supply and Demand, so click HERE for the streaming video (need Real Player), but I recommend Real Alternative aka Media Player Classic, click HERE for the download page
Once again the link for the video lecture is HERE
Once again the link for the video lecture is HERE
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