Microeconomics: Costs and opportunities
A Matter of Costs (9/11/2007)
The rate at which variable cost changes in the short run is related to the nature of the fixed cost.
The rate at which variable cost changes in the short run is related to the nature of the fixed cost.
A Matter of Opportunities (7/7/2006)
The lack of alternative opportunities reduces the cost or enhances the attraction of a given action. On the other hand, the abundance of alternative opportunities increases the cost or reduces the attraction of a given action.
The lack of alternative opportunities reduces the cost or enhances the attraction of a given action. On the other hand, the abundance of alternative opportunities increases the cost or reduces the attraction of a given action.
Aerial Predators? (6/22/2001)
Are major airlines that temporarily lower their fares to squeeze out their low-fare niche-market startup competitors guilty of predatory pricing?
Are major airlines that temporarily lower their fares to squeeze out their low-fare niche-market startup competitors guilty of predatory pricing?
Baby Dilemma (9/1/2005)
Low fertility among educated women threatens to lower the supply of high-skilled workers.
Low fertility among educated women threatens to lower the supply of high-skilled workers.
Comparative Advantage (notes) (3/27/2007)
Converting output per unit time table to time per unit output table.
Converting output per unit time table to time per unit output table.
Condom Economics (3/7/2007)
The externality and time horizon of costs and benefits bedevil college distribution of condoms.
The externality and time horizon of costs and benefits bedevil college distribution of condoms.
Cost curves under increasing and diminishing returns (8/3/2007)
Under increasing returns, high fixed cost and low variable cost lead to persistently declining average total cost. The market can accommodate only one firm. Under decreasing returns, low fixed cost and rapidly rising variable cost lead to U-shaped average total cost. The market can accommodate many firms.
Under increasing returns, high fixed cost and low variable cost lead to persistently declining average total cost. The market can accommodate only one firm. Under decreasing returns, low fixed cost and rapidly rising variable cost lead to U-shaped average total cost. The market can accommodate many firms.
From AFC and AVC to TC (6/23/2006)
Average total cost can be derived from adding AFC and AVC together or directly from total cost.
Average total cost can be derived from adding AFC and AVC together or directly from total cost.
From production function to cost function (6/23/2006)
Derive the total variable cost from the total product curve using Flash animation.
Derive the total variable cost from the total product curve using Flash animation.
Fund Raising at the Margin (9/22/2006)
The MR = MC profit maximization rule could be applied to fund raising.
The MR = MC profit maximization rule could be applied to fund raising.
Generating ATC and MC of natural monopoly (6/30/2006)
High fixed cost and low marginal cost means that marginal cost is always below average total cost given the market demand.
High fixed cost and low marginal cost means that marginal cost is always below average total cost given the market demand.
Generating combined production possibility curve (6/23/2006)
Explain comparative advantage and derive a combined production possibility curve (frontier) from two linear PPCs using Flash animation.
Explain comparative advantage and derive a combined production possibility curve (frontier) from two linear PPCs using Flash animation.
Higher output under partial specialization (6/23/2006)
Partial specialization based on comparative advantage leads to higher total output.
Partial specialization based on comparative advantage leads to higher total output.
Identifying comparative advantage (8/28/2006)
How to plot production possibilities curve (frontier) and identify comparative advantage in a two-persons two-goods economy.
How to plot production possibilities curve (frontier) and identify comparative advantage in a two-persons two-goods economy.
Labor on Call (1/10/2007)
Flexible work scheduling to match customer traffic is one effective way to transform labor from a fixed cost into a variable cost in the retail business.
Flexible work scheduling to match customer traffic is one effective way to transform labor from a fixed cost into a variable cost in the retail business.
Law of Diminishing Returns - flash (9/23/2006)
The law of diminishing returns can be represented by a S-shaped production curve in the short run.
The law of diminishing returns can be represented by a S-shaped production curve in the short run.
Law of Diminishing Returns - youtube (11/2/2011)
The Law of Diminishing Returns says that when some inputs are fixed in capacity in the short run, increasing the variable input working with the fixed inputs would first lead to increasing additional output per additional unit of variable input, but eventually decreasing additional output per additional unit of variable input after the optimal capacity of the fixed input has been exceeded.
The Law of Diminishing Returns says that when some inputs are fixed in capacity in the short run, increasing the variable input working with the fixed inputs would first lead to increasing additional output per additional unit of variable input, but eventually decreasing additional output per additional unit of variable input after the optimal capacity of the fixed input has been exceeded.
Law of Diminishing Returns - youtube (transcript) (1/29/2012)
The Law of Diminishing Returns says that when some inputs are fixed in capacity in the short run, increasing the variable input working with the fixed inputs would first lead to increasing additional output per additional unit of variable input, but eventually decreasing additional output per additional unit of variable input after the optimal capacity of the fixed input has been exceeded.
The Law of Diminishing Returns says that when some inputs are fixed in capacity in the short run, increasing the variable input working with the fixed inputs would first lead to increasing additional output per additional unit of variable input, but eventually decreasing additional output per additional unit of variable input after the optimal capacity of the fixed input has been exceeded.
Load Pricing (9/17/2002)
Peak-load pricing can lower electric bills and increase business profitability by inducing household consumers to shift their consumption from higher-rate peak period to lower-rate slack period.
Peak-load pricing can lower electric bills and increase business profitability by inducing household consumers to shift their consumption from higher-rate peak period to lower-rate slack period.
Marginal Cost and Average Total Cost - youtube (11/2/2011)
Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.
Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.
Marginal Cost and Average Total Cost - youtube (transcript) (1/29/2012)
Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.
Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.
Marginal Cost, Average Variable Cost and Average Fixed Cost - youtube (11/2/2011)
Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.
Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.
Marginal Cost, Average Variable Cost and Average Fixed Cost - youtube (transcript) (1/29/2012)
Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.
Marginal cost, average variable cost and average fixed cost can be derived from a short-run production function subject to the law of diminishing returns.
Mickey Mouse Economics (10/26/2002)
By spreading out large fixed cost over more customers, price discrimination directly increases Disney World's profit.
By spreading out large fixed cost over more customers, price discrimination directly increases Disney World's profit.
My Prom Dates - youtube cartoon (11/2/2011)
Opportunity cost is the best available opportunity you need to give up for a given choice.
Opportunity cost is the best available opportunity you need to give up for a given choice.
Niche Specialization (1/30/2007)
Niche comparative advantage in location proximity and fast response time could overcome the disadvantage of high wages in the garment industry.
Niche comparative advantage in location proximity and fast response time could overcome the disadvantage of high wages in the garment industry.
Opportunities Pay (9/5/2005)
Job security of American workers whose opportunity costs are higher but whose labor productivity is no higher than foreign workers will be increasingly threatened by foreign competition.
Job security of American workers whose opportunity costs are higher but whose labor productivity is no higher than foreign workers will be increasingly threatened by foreign competition.
Picket Line for Rent (8/20/2009)
Outsourcing the picket line makes economic sense but might dilute the moral force of the protest.
Outsourcing the picket line makes economic sense but might dilute the moral force of the protest.
Price Gouging? - Historical Cost vs Opportunity Cost cartoon (4/12/2013)
Pricing at opportunity cost rather than historical cost can solve market shortages. In other words, "price gouging" can be an unsung hero.
Pricing at opportunity cost rather than historical cost can solve market shortages. In other words, "price gouging" can be an unsung hero.
Short-run supply curve for price taker (9/23/2006)
Short-run supply curve for the price taker is its marginal cost curve above the shut-down point.
Short-run supply curve for the price taker is its marginal cost curve above the shut-down point.
The Case for Sweatshops (1/23/1999)
Sweatshops in low wage countries supplying goods to American companies may offer better paying jobs than other local firms.
Sweatshops in low wage countries supplying goods to American companies may offer better paying jobs than other local firms.
The Harried Leisure Class (9/3/1999)
Consumers in rich countries have become harried in their futile attempt to increase the productivity of their non-work time.
Consumers in rich countries have become harried in their futile attempt to increase the productivity of their non-work time.
The High-Tech Treadmill (6/22/2001)
The profit of New Economy business firms that have very high R&D fixed costs and very low marginal costs is brutally squeezed in economic downturn.
The profit of New Economy business firms that have very high R&D fixed costs and very low marginal costs is brutally squeezed in economic downturn.
The Snowball Effect (11/9/2001)
Knowledge-based industries subject to increasing returns because of high R&D fixed costs and low variable costs naturally tend to monopolize the market.
Knowledge-based industries subject to increasing returns because of high R&D fixed costs and low variable costs naturally tend to monopolize the market.
The Tragedy of the Anticommons (8/13/1999)
When too many individuals have the right of exclusion to a scarce resource, and no one has an effective privilege of use, under-utilization may occur.
When too many individuals have the right of exclusion to a scarce resource, and no one has an effective privilege of use, under-utilization may occur.
The Wedding Party Dilemma- To Go or Not to Go? (1/29/2014)
The cost and benefit of human relationships cannot always be measured in dollars and cents.
The cost and benefit of human relationships cannot always be measured in dollars and cents.
Transaction Costs and Market Structure (2/2/2000)
The ubiquitous existence of transactions costs in the real world determines both the institutional structure within which prices are set and the level of prices.
The ubiquitous existence of transactions costs in the real world determines both the institutional structure within which prices are set and the level of prices.
Underground Homes (2/27/2007)
Influx of illegal immigrant workers to the U.S. homebuilding industry has made new homes more affordable but kept the home construction business labor intensive.
Influx of illegal immigrant workers to the U.S. homebuilding industry has made new homes more affordable but kept the home construction business labor intensive.
Unsinkable Sunk Cost (6/17/2004)
Health club usage patterns clearly show that members are emotionally attached to sunk cost even though most economists think that rational incremental decisions should only compare marginal benefit with marginal cost.
Health club usage patterns clearly show that members are emotionally attached to sunk cost even though most economists think that rational incremental decisions should only compare marginal benefit with marginal cost.
Untangling Marginal vs Average Value (9/22/2006)
When average value is falling, marginal value is below it. And when average value is rising, marginal value is above it.
When average value is falling, marginal value is below it. And when average value is rising, marginal value is above it.
White-collar unions (1/16/2006)
White-collared workers are increasingly affiliated with beleaguered blue-collared labor unions to bulk up their collective bargaining position over non-wage issues.
White-collared workers are increasingly affiliated with beleaguered blue-collared labor unions to bulk up their collective bargaining position over non-wage issues.
Who Has Comparative Advantage? - youtube (11/2/2011)
Comparative advantage in a two-goods, two-workers economy can be identified easily by comparing the relative slopes of their linear production functions.
Comparative advantage in a two-goods, two-workers economy can be identified easily by comparing the relative slopes of their linear production functions.
Who Is Over a Barrel? (1/20/2015)
The impact of low oil prices on oil output depends on the cost structures of different types of oils.
The impact of low oil prices on oil output depends on the cost structures of different types of oils.
