Mikroekonomi

Microeconomics deals with the behavior of individual economic units. These units
include consumers, workers, investors, owners of land, business firms
Microeconomics explains how and why these units make economic decisions and
how economic units interact to form larger units- market and industries
Macroeconomics, deals with aggregate economic quantities, such as the level and
growth rate of national output, interest rates, unemployment, and inflation
The boundary betweem macro and microeconomics has become less and less
distinct in recent years
Microeconomics deals with both positive and normative questions. Positive
questions have to do with explanation and prediction, normative questions with what
ought to be.
Eq. Indonesian govt imposes a quota on the import of sugars. What will happen to
the price of sugars and to their production and sale ? What impact will this have on
consumers ? On workers in the sugar industries ? These questions are POSITIVE
analysis
What is the best due to the policy ? This involves normative analysis
Normative analysis is not only concerned with alternative policy option it also
involves the design of particular policy choice
Nortmative analysis is often suplemented by value judgement. Equity Vs Economic
efficiency etc.
 Mikroekonomi

What is a Market ?
A market is a collection of buyers and sellers that interact,
resulting in the possibility for exchange
Competitive Versus Non-competitive Markets
The extent of a market refers to its boundaries, both geographic
and in terms of the range of products to be included in it
Arbitrage : a commodity is bought and sold in a world market but
the cost of transporting commodity is small relative to its value
and there is significant different price between locations.
Arbitrageurs (person who is doing arbitrage)
Real versus Nominal Prices
Nominal price of good is just its absolute price
Real price of a good is the price relative to an aggregate
measure of prices (CPI)
 Mikroekonomi

Supply-demand analysis is a fundamental

and powerful tool that can be applied to a
wide variety of interesting and important
problems: govt price control, minimum
wages, subsidies, taxes, tariff, and import
quotas affect concumers and producers
Supply-demand are used to describe the
market mechanism
The characteristics of supply and demand
may differ from one market to another
 Mekanisme Pasar

h
a
r
g S
a Surplus

p0

Shortage
D

Q0 Jumlah
 Mekanisme Pasar

Shift in supply due to production costs fall

h
a
r
g S
a S

p0

p1

Q0 Q1
Jumlah
 Mekanisme Pasar

h
a
r
g S
a S

p1

p0

Q0 Q1 Jumlah

New equilibrium following Shift in supply and demand

 Mekanisme Pasar
Shift in demand due to income, the weather or prices of
h other goods (substitute/complementary)
a
r
g S
a
p1

p0

D
D

Q0 Q1 Jumlah
 Mekanisme Pasar

h
a
r
g S2001
S2003
S2009

a
p1
Long-run path of price
p0 and consumption

D2009

D2003

D2001

Q0 Q1 Jumlah

New equilibrium following Shift in supply and demand

 Elasticities of Supply and Demand

An elasticity is a measure of the

sensitivity of one variable to another: the
percentage change that will occur in one
variable in response to a 1 percent
change in another variable
Ep = (% Q)/ (% P)
Ep = (Q/Q) / (P/P) = (P/Q)((Q/P)
 Elasticities of Supply and Demand

Infinitely Elastic Demand

Price

P* D

Quantity
 Elasticities of Supply and Demand

Inelastic Demand
Price
D

Q* Quantity
 Elasticities of Supply and Demand

Price
DSR
DLR

Gasoline
Automobile

DLR
DSR

Quantity
In long run old cars
In long run change run out & buy new
to efficient car cars
 Elasticities of Supply and Demand

Price
SSR SLR
SSR
SLR

Secondary
New Steel
Steel

Quantity
In long run the In long run stock of
capacity change scrap falls
 Effects of Government Intervention-Price Control

h
a
r
g S
a

p0 If price is regulated to be no higher than P max supply falls

to Q1, demand increase to Q2, and a shortage demand

pmax

Excess Demand
D

Q1 Q0 Q2 Jumlah