Video: Principles of Economics

Hi,

I've stumbled upon this video on Youtube. On a more serious note, I felt that the points listed helped me recap some of the (micro)economic concepts that have been covered in our syllabus so far. If I'm not wrong, the list includes some threshold concepts as found in John Sloman's Economics (2006), like:

1) Choice and opportunity cost: We should all be familiar with this. The opportunity is the cost of doing something measured in terms of the next best alternative forgone. There are (almost) always trade-offs for any economic decision; just like in an essay, the benefits and costs have to be weighed.

2) Marginal thinking and decision-making: This involves considering the marginal benefits and costs: once again, the concept of opportunity cost comes back into play. Marginal cost and revenue help firms to determine their profit-maximing and revenue-maximising outputs.

3) Reponse to incentives: This refers to how producers and consumers respond to changes in price - firms are incentivised to produce more; consumers will buy less. This also ties in with the concepts of price, income and cross elasticity of demand and supply. Another subtopic is profit-maximisation of firms, regardless of whether they are PC firms or monopolies (yes, money does make the world go round).

4) People gain from voluntary economic interaction: Both parties stand to benefit from mutual interaction, such as that between an employer and employee (the employer/firm earns revenue while the employee earns a wage); trade betwen nations (each nation may specialise in a certain industry, or producing and exporting a particular good like agricultural products; this means that each country can attain the necessary items without having to spend a huge sum of money to produce every single item it needs). At the level of a single firm, it is somewhat analogous with the specialisation and division of labour, and how firms choose to specialise in a certain product rather than a wide range.


5) Governments can sometimes improve market outcomes: You may think along the lines of government intervention like taxes, price floors and ceilings (which are concepts discussed in the topics on price controls, as well as under the monopoly market structure).

The video is here:



Jeremy Lim
P.S. I've forgotten to add that this video is solely for your amusement and is not to be taken seriously (obviously!).