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BUS 310 Concepts of Microeconomics

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The BUS 310 Concepts of Microeconomics course is basically the application of economic analysis in business decision making. Microeconomics comprehends what can happen (trends) when people make decisions in response to changes in incentives, prices, resources, and/or production methods. Individual participants are generally divided into microeconomic subgroups such as buyers, sellers, and business owners. These groups use currencies and interest rates as a coordinated pricing mechanism to create a relationship between supply and demand for resources.

The study of microeconomics includes several key concepts, including (but not limited to):

  • Motivation and behaviour: how people or companies react to the situation they face.
  • Utility theory: Consumers will choose to buy and consume the combination of goods that maximizes their happiness or "utility", depending on the amount of income they can use to consume.
  • Production theory: This is the study of production or the process of converting costs into production. Manufacturers strive to select a mix and match of resources to minimize costs and maximize profits.
  • Price theory: The interaction between utility theory and production creates a theory of supply and demand that determines price in a competitive market. In a perfectly competitive market, you conclude that the consumer's ask price is the same as the producer's bid price. This leads to economic equilibrium.

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