Tag Archives: Microeconomics

Is Apple Losing Favor?

Apple has a problem. . .

Six years ago when I first came to China, Steve Jobs was their hero much like Jack Ma. He came from a nondescript background and built a billion-dollar company.

They loved anything and everything Apple — walking in with the newest iPhone was a necessity for flaunting economic status much as wearing Louis Vuitton or Coco Chanel.

This week I polled my students about their impressions of the new iPhone.

Approximately 200 students spread across five classes participated as I asked them

1) Who (if you had the money) would purchase the new iPhone? and
2) Who (even if you had the money) would not?

Amongst all the students (and with a good 80-85% participation rate), fewer than 15 raised their hands that they would buy. The vast majority actively stated they had no interest in the new phone.

Many cited appearance, but others pointed to

Customer service,
Unreasonable pricing for the value,
Expensive and incompatible accessories,
Non-integration with educational and professional needs (.pages doesn’t open on many computers),
Preference for domestic brands
Other

These students are in one of the most expensive programs in China. They ARE the ones who have the money . . . if they aren’t buying, it’s not looking good.

Anyone else get similar impressions?

Tags: Apple, Apple Products in China, Economics, International Business, International Trade, Microeconomics, Trade with China, US China Trade

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Categories Business & Economics

What is the #DemandCurve in #Economics?

18 May

What is the #Demand Curve in #Economics?
Demand is the number of products the buyers are willing to purchase.

In #Microeconomics, we often look at the demand of one company or buyer.

In #Macroeconomics, we sometimes talk about Aggregate Demand (how many are will all buyers in the market purchase at each price).

Below is a simple explanation of the Supply Graph and what you need to know!

Let’s say that Mike is buying pencils from Metro (Màidélóng)

We want to know what price should Metro charge?

Demand Curve.jpg

This picture is very helpful! The light Green Line (Demand – 需求) tells us how many pencils Mike will buy at each price.

Situation #1: The price is $3.00, Mike is willing to buy 50 pencils.

Situation #2: The price is $1.00, Mike is willing to buy 70 pencils.

Situation #3: The price is $4.00 and Metro has 30 pencils. Will Mike buy them?

Answer: Yes! Mike wants 40 pencils, of course he would buy 30 if they are available.

Situation #4: The price is $4.00 and Metro has 50 pencils. Will Mike buy them?

Answer: No! Mike only wants 40 pencils, so he is never going to buy 50.

So we could draw the picture like this:

Demand Possibility.jpg

So what is the Demand (需求) Curve?

It tells us the MAXIMUM (最大) number of products Mike will buy at each price.
It tells us how many products Mike will NOT buy.
It gives us an idea of what price we should choose. For example, if the price is $8.00, Mike won’t buy any pencils!

Law of Demand (需求法则) ~ When price increases (上扬), buyers will be willing to buyer less products than before (when price goes up, we buy less).

Tags: Demand, Demand Curve, Economics, macroeconomics, Microeconomics, Teaching Econ, Teaching Economics

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Categories Business & Economics, Life, Teaching

Abbreviations are CRAZY

28 Nov

Me: “If I give you Q, TVC, and TFC you can find TC, AVC, AFC, SMC, ATC, etc.”

Students: 😓😵

Me: 🤣 Let’s try it step by step. . .

Tags: business, Business Classes, classes, Econ, Economics, Economy, Humor, Microeconomics, Teaching

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Categories Business & Economics, Life, Teaching

Snickerdoodle #Treats!

31 Oct

Making yummy #Snickerdoodles for the 8 #proctors of my #exam today 😊 320 students, 4 classrooms, one exam. Go #microeconomics students!!! Fighting!! Jiayou!

Tags: college, Economics, Exam Halloween, Microeconomics, Midterm, Student, Teacher, Teaching

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Categories Business & Economics, Teaching, Uncategorized

Managerial #Economics ~ Understanding #MRTS the Fun Way!

12 Jun

As always, this lesson is not intended to be professional advice. This is simply lesson material for ESL students in a Managerial Economics and Finance class. Posted here for their use or for helping other students.

PART 1 – Key Words

Quantity (量) ~ How many products = Q (# of 🚗)
Labor (员工) ~ The Number of Workers = L (👱)
Capital (资金) ~ The Money ($$) we need = K (💲)
Change (变化) ~ How much did the # change? = Δ(🔺)
Marginal (边际成本) ~ Result if you add ONE MORE (+1) Q
Rate (比率) ~ Ratio
Substitution (取代) ~ XK = 1L (Substitution asks “what is X?”)
Input (输入) ~ All the resources you put into a product.
1. Ice Cream 🍦has many inputs:
  1. Milk🥛
  2. Eggs🍳
  3. Sugar
  4. Ice
  5. Salt
  6. Chocolate Sauce
Output (产量) ~ The product you create
1. Ice Cream 🍨🍦is the output!

Part 2 – The Relationship Between L, K, and Q

Every product (产量) can have lots of inputs (输入), just like the Ice Cream 🍦 or a Car 🚗.

Input + Input + Input + Input = Output (🚗)

But in our class, we focus on TWO inputs: Labor (👱) and Money (💲)

👱+💲=🚗
Labor (👱) + Money (💲) = Quantity (🚗)
L (👱)+ K (💲)= Q(🚗)

Example:
Justin sells 200 cars 🚗every day. Not 201 cars. Not 199 cars. He sells EXACTLY 200 cars 🚗every day.

L (👱) + K (💲) = 200 cars (🚗)

Justin knows that in ONE DAY🔆:

1 worker 👱 can create 50% of a car 🚗~ 2 workers 👱👱can create 100% of a car 🚗(one car)
- 1L = 0.5Q 🚗
- 2L = 1Q 🚗
$5 💲 can pay for 20% of a car 🚗~ $25 💲can pay for 100% of a car 🚗(one car)
- 1K = 0.2Q 🚗
- 5K = 1Q 🚗

Rule #1 ~ If L ⬆ and K ⬆, then the # of 🚗 cars will also ⬆

Rule #2 ~ If L ⬇ and K ⬇, then the # of 🚗 cars will also ⬇

Rule #3 ~ If L ⬇ and the # of 🚗 cars is still 200 (stay the same), K must ⬆

Rule #4 ~ If K ⬇ and the # of 🚗 cars is still 200 (stay the same), L must ⬆

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Today, Justin looks 🤔at his Money 💲and is NOT happy😭. He thinks he spends TOO MUCH money😡! He wants to buy a new bicycle🚲, so he decides to SAVE $100 💲

This means today:

👱L + (💲K – 💲100K) = ? Q🚗

WHAT IS THE NEW Q (number of cars🚗) that Justin Makes Today?

Day 1 (Yesterday): 👱L + 💲K = 🚗200Q

Day 2 (Today): 👱L + (💲K – 💲100K) = 🚗200Q – all the 🚗cars $100K would pay for.

Remember! 💲1K = 🚗0.20Q (one dollar pays for 0.20 cars in a day)

If Justin does not spend $100 today, he will lose the money for 20 cars!

1K = 0.20 cars
💲-100K = -20 cars🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗🚗

ANSWER: Justin makes 180 cars today!

L + (K – 100K) = 200 cars – 20 cars
= 180 cars🚗

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

OK?!?🤔

NO!!! 😡Remember –> “Justin sells 200 cars 🚗every day. Not 201 cars. Not 199 cars. He sells EXACTLY 200 cars every day. ”

PROBLEM: How can Justin still make and sell 200 cars tomorrow if he still saves the $100 (-100K) as today.

Rule #4 ~ If 💲K ⬇ and the # of 🚗 cars is 200 (the same), 👱L must ⬆

QUESTION: HOW MUCH should 👱L go up (⬆)?

Step 1 ~ How many extra cars 🚗does Justin need to make? ~ Justin can make 180 cars right now if he saves $100 (-100K) but L stays the same as yesterday.

200 🚗 – 180 🚗= 20🚗
Justin needs to make 👱L ⬆ enough to make 20 extra cars🚗 tomorrow.

Step 2 ~ How much L does Justin have to add (+) to make 20 more cars tomorrow?

?L + (K – 100K) = 200Q

Remember,

👱1L = 0.5Q 🚗 | 👱👱2L = 1Q 🚗
20Q 🚗= 40L

ANSWER: Justin will have to hire 40 workers (+40L) in order to make 20 more cars tomorrow.

👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫👫

FINAL SOLUTION

*Substitution = Adding L to Decrease K

(👱L + 👱40L) + (💲K – 💲100K) = 200 Q (🚗)

Part 3 ~ MRTS

MRTS = Marginal Rate of Technical Substitution

Go Back to Part 2.

🔺K💲
- Yesterday, Justin had K💲
- Tomorrow, Justin has -100K💲
- 🔺K = -100K💲
🔺L👱
- Yesterday, Justin had L👱
- Tomorrow, Justin has +40L👱
- 🔺L = +40L👱