What Happens in a Situation of a Microeconomic Activity (Essay Sample)

MICROECONOMICS CASE STUDY
Name
Institution
Introduction
Economics is a social science which studies human behavior when a person is faced with unlimited wishes but holds limited means to satisfy them. Microeconomics is the study of an individual household, a person, a limited industry on how they distribute their small means among the possible different uses to ensure maximum gain. Microeconomics concentrates on a little section of the economy, and it examines the basic leadership process and monetary issues of people in an economy concerning how they utilize constrained means or assets available to them for fulfilling their boundless closures (Coase, 2012). The paper shows what happens in a situation of a microeconomic activity and also analyzes the aspects of microeconomics. There is three aspect of microeconomic activities which include, the theory of factor pricing, theory of firm and product pricing, and lastly welfare financial matters.
The hypothesis of firm and item estimating talks about analysis on the following topics including the theory of product pricing in various market situations, the principle of markets, concept of cost and notion of demand and Supply. In digest, the theory of Firm addresses demand and supply environment encountered by private enterprises, industries. It talks about how given assets can be appropriated to guarantee amplification of quality or minimization of an organization's expense. Furthermore, it examines different business sector circumstances where the perfect market and imperfect markets like oligopoly, monopoly, duopoly, and monopolistic competition lay (López, 2005).
So that we understand what happens in that situation, the following case study can help understand the theory. Assuming the case of an undergraduate student who is still studying and he doesn't have a regular source of income apart from the monthly pocket money of $750 the parents regularly offer, then that pocket money is the only monetary source to take care of the student’s monthly expenses. Thus, we can say that the student has a limited financial resource of $750 per month to satisfy their various desires and requirements. Let us further appropriate that the student’s many desires and requirements include the desire to see the recent movie which has is declared a box office hit. He needs to buy a fresh out of the plastic new auto like which his companion claims and uses; he needs to buy cellular telephone cum tablet which has been as of late dispatched by MNP Company in the business sector. The need to eat out with his companions in great eatery situated close to their school. Also, he has to purchase individual course books as the end semester examinations are close, and he needs to spend on taking print out of the six class assignments due for accommodation to the school by the end of this current month.
In a nutshell, the student’s desires and requirements are many, and their means limited to $750 that they get every month as pocket money. In such a case, the understudy will need to organize their cravings and prerequisites on the premise of their significance and the additions connected with them. In other words, the student will be able to satisfy only some of their desires and requirements and not all as they have limited means or resources. Consequently, in the above example, an individual might be in the position to satisfy only a few desires and requirements including; paying for taking print out of the six class assignments due for submission, buying course books for the examination preparation and either seeing the movie released recently or eating out with your friends.
In that example, we see various aspects of microeconomics. The best shown is the presence of high demand concerning wants whereas the amount of money needed in limited which results in the a...