(Podcast) Principles of Microeconomics

Episode 1 gives a brief description of economics in general. Several economic concepts and terms, such as scarcity, choice and opportunity cost, will be introduced besides discussion on major problems and issues that economics attempts to address.

Episode 2 lays the foundation for understanding market economy. Almost all economic issues could be explained by applying the concept of demand and supply.

Episode 3 is a continuation of the concepts of demand and supply. Demand and supply or price mechanism will determine how resources, goods and services are distributed. The main discussion will relate to demand and supply, their determinants and the equilibrium of the market. In this context, relationship between demand and supply, price levels and other variables will be discussed further in detail so as to understand market behaviour. These relationships are explained with the concept of elasticity. Understanding of the concept of elasticity is useful for consumers, producers and government in the process of making decisions. The concept of elasticity includes price elasticity of demand, income elasticity of demand, cross elasticity of demand and elasticity of supply.

Episode 4 discusses satisfaction or utility as a motive for consumption. Even though satisfaction is abstract or subjective, numerical value is used to differentiate between total utility and marginal utility. When the concept of marginal utility is integrated with budget constraints, it will result in the equilibrium of consumers. From this condition and equilibrium, arises the law of demand and demand curve, and the consumption substitution concept.

Episode 5 provides the basis for producer behaviour. Discussion begins with concepts related to production process such as input and output, firm, plant and industry, and production time frame. Subsequently, production in the short run with a fixed input and a variable input will be discussed, together with concepts related to diminishing marginal returns and production levels. The last section examines production in the long run, involving the utilisation of two variable inputs. This production decision outcome in the long run is made based on the concepts of isoquant and isocost.

Episode 6 discusses the concepts directly related to the production process, which form the cost theory. The economic cost concept is the basic concept in discussion on the overall cost. Following this, the concept of cost in the short run is discussed. Long run cost will be borne when the period of production changes and becomes long run, therefore giving rise to the relationship between short run cost and long run cost. Discussion on economies of scale is presented in the last section.

Episode 7 deals with the basic market structure in a free market economy, that is, the perfect competition market. Here, we will look at how a firm makes decisions on price and output in order to maximise profit. Discussion begins by introducing the characteristics of the perfect competition market, followed by means of maximising profit. Subsequently, the discussion focuses on the equilibrium of firm and market in the short run. Finally, we discuss how the firm and industry achieve equilibrium in the long run.

Episode 8 explains the market structure which contradicts the perfect competition market, that is, the monopoly market which comprises of only one seller. The discussion highlights factors that contribute towards the existence of the monopolist and the major characteristics of monopoly. Then, profit maximisation in the short run and long run in monopoly is examined. Finally, the concept and theory of price discrimination is clarified.