Talk:Microeconomics

Page contents not supported in other languages.
From Wikipedia, the free encyclopedia

Average total cost is a vague and ambiguous term[edit]

The term "average total cost" is vague and ambiguous. Does total cost mean the total cost of production? If so what is it averaged over? Does total cost refer to the cost to produce a single unit of output? If so why not just call it cost? And why not talk about the average cost to produce a unit of output?

What the article means is average cost =Total cost/quantity produced Lbertolotti (talk) 18:38, 17 March 2013 (UTC)[reply]

Relationship between price and quantity demanded[edit]

The statement is a bias in favor of unplanned economy. The set of choises just showes people buy what they can afford and price things at what they can afford. It is not necessarily the "happiest" set of choices. Both supply side and demand side could still be starving. — Preceding unsigned comment added by 69.3.117.129 (talk) 07:23, 12 February 2013 (UTC)[reply]

Sentece removed because it didnt make logical sense.Lbertolotti (talk) 18:37, 17 March 2013 (UTC)[reply]

Metric space?[edit]

In the Assumptions & Definitions section, it is stated (without explanation) that an actor's preferences are a metric space. However, as I understand both preferences and metric spaces, this seems to be incorrect. A metric space not only allows comparison between any two points, but it also has a "metric" that can associate a scalar magnitude to any point...e.g., with a metric space, you can not only say that "she prefers apples to oranges", but you can say "she prefers 1.6 apples to one orange" -- which may not necessarily be possible; as I understand it, this is the point of the distinction between "ordinal" and "cardinal" utility. 2601:9:3400:74:8541:A080:BAB0:70F5 (talk) 18:49, 16 May 2014 (UTC)[reply]

This page is very helpful. — Preceding unsigned comment added by 71.205.30.57 (talk) 01:16, 30 October 2014 (UTC)[reply]

Dr. Chen's comment on this article[edit]

Dr. Chen has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

"Also considered is the elasticity of products within the market system": The elasticity is a concept in the general topic of demand analysis. It should not have equal importance as, e.g., "markets under asymmetric information" which is usually a chapter by itself in a standard microeconomics textbook. The section on "Behavioral economics" traces the history, but does not give a definition of behavioral economics, which should be defined as a new field of study at the intersection of psychology and economics, which takes robust insights from psychology experiments seriously and formalize it using the rigorous language of economics.

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Chen has published scholarly research which seems to be relevant to this Wikipedia article:

  • Reference 1: Goldfarb, Avi, et al. "Behavioral models of managerial decision-making." Marketing Letters 23.2 (2012): 405-421.
  • Reference 2: Jeon, Grace YoungJoo, Yong-Mi Kim, and Yan Chen. "Re-examining price as a predictor of answer quality in an online Q&A site." Proceedings of the SIGCHI conference on human factors in computing systems. ACM, 2010.
  • Reference 3: Chen, Yan, TECK‐HUA HO, and YONG‐MI KIM. "Knowledge market design: A field experiment at Google Answers." Journal of Public Economic Theory 12.4 (2010): 641-664.

ExpertIdeasBot (talk) 02:50, 30 October 2014 (UTC)[reply]

External links modified[edit]

Hello fellow Wikipedians,

I have just modified one external link on Microeconomics. Please take a moment to review my edit. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. I made the following changes:

When you have finished reviewing my changes, you may follow the instructions on the template below to fix any issues with the URLs.

This message was posted before February 2018. After February 2018, "External links modified" talk page sections are no longer generated or monitored by InternetArchiveBot. No special action is required regarding these talk page notices, other than regular verification using the archive tool instructions below. Editors have permission to delete these "External links modified" talk page sections if they want to de-clutter talk pages, but see the RfC before doing mass systematic removals. This message is updated dynamically through the template {{source check}} (last update: 18 January 2022).

  • If you have discovered URLs which were erroneously considered dead by the bot, you can report them with this tool.
  • If you found an error with any archives or the URLs themselves, you can fix them with this tool.

Cheers.—InternetArchiveBot (Report bug) 17:20, 10 June 2017 (UTC)[reply]

How banks impact the economy[edit]

How banks impact the economy SIMON JAMES Blogspot.com Registration Number: 254723294504 Date: 2nd March 2021   How banks impact the economy Introduction Banks play a vital role in the financial system and the economy. Banks can efficiently distribute funds from investors to borrowers, a key element in the financial system. They provide financial services and reduce the cost of gaining information about economic opportunities, savings, and borrowing. The financial services offered by banks improve the overall structure of the economy. The banking sector influences the economy by using the financial assets as leverage, holding assets, and regulating other banking agencies, while its actual value is just on paper. The banking sector's core activity is to keep financial assets, and they have also expanded to holding gold coins for the exchange of promissory notes. It diversifies the risks involved by developing investments and issuing loans that earn interest. The economy is boosted due to the implementations enacted to curb activities that may trigger an economic crisis. The Federal Deposit Insurance Corporation was created to curb the panic that banks experienced in the previous years when the regulations were limited. The clients trust the banks to keep their deposit and withdraw it when needed by the owner. Therefore, the banks must have enough money of at least 8% of their books value to avoid concurrent withdrawals that can lead to bankruptcy. All banks' functions follow governmental regulations to regulate the economy; they diversify the risks and give out loans on interest. Because the investment is diverse, it protects against loan defaulting and other unexpected risks which may sink the whole bank (Saunders, 2014). The banks regulate all the activities enacted by the government and therefore control the economy by reducing and mitigating all the activities that may cause an economic crisis. The Federal Deposit Insurance Corporation was created in 1933 to check the panics experienced by the banks in previous years. The banking sector is an essential structure for maintaining the public's trust and implementing regulations to create trust. Banking Regulations These forms of government regulation focus on maintaining specific requirements, limitations, and rules designed to create transparency in the market between the banking institutions, individuals, and corporations as they conduct business. The U.S. government enacted the Bank Secrecy Act and the USA Patriotic Act to curb money laundering and financing terrorist activities. As a result, several risk management standards were incorporated in the sector to eliminate the risks of transferring illegal money in and out of the economy through a complex web of transactions. All the banks seeking to establish subsidiaries must meet specific risk management standards due to the regulations. The Federal Reserve Board makes comprehensive reviews of the foreign banking agencies to ensure compliance with the anti-money laundering regulations. All banks must meet these standards to do any transactions with the American financial system. Roles of regulations in Risk Management Within Banks Risk management is essential in the banking sector because it ensures the bank's profitability and reliability. The regulators must maintain the safety and security of the financial system. Over the past few decades, the banking sector has developed with progressive and innovative trading technologies and sophisticated products. Apart from enhancing bank's major roles like promoting profitability and diversifying the risk, these advancements also raise fundamental bank risk management challenges. Bank risk management is considered weak in relation to the rapid changes in the markets; thus, bank risk management is becoming a significant concern for regulators and policymakers. Anti-money laundering policies and regulations play a vital role in promoting the integrity of the banking system. The rules in risk management include;  The Bank Secrecy Act (BSA), which is a crucial anti-money laundering law, was created in 1970 to control acts of money laundering and make sure that banks also discourage its enhancement by all means. They impose and implement several obligations that banks need to comply with while operating within America.  The USA Patriotic Act is a regulation enacted in 2001is to increase BSA's scope and operations by empowering law enforcement agencies to mitigate terrorism by monitoring financial crimes (Saunders, 2014). How Banks Work Banks operate by depositing funds or by borrowing in the money markets. Banks borrow from individuals, other financial institutions, and governments with surplus funds. They use the deposits and the borrowed funds from other institutions to make loans and purchase securities to increase their assets base. Banks then can issue these loans to businesses, individuals, other financial institutions, and the governments at an Interest rate that provides the price signals for the borrowers and other banks. The process of depositing money, issuing loans, and responding to the interest rate signals makes the banking system and channeling of funds more efficient. The savers range from individuals with a small amount of money or deposit certificates to a big corporation with millions of dollars in their savings. Banks can service an array of borrowers, from the individual taking a minimal amount of loan to significant corporations that finance multi-billion-dollar corporations. The bulk of banks' funding comes from deposits and savings, money market accounts, and certificates. The significant uses of the funds are in real estate and commercial or industrial loans. Banks are only One Type of Financial Institution Several new products and services have found their way into the new financial instruments and institutions. Currently, many other institutions offer financial intermediaries. They include savings institutions, established insurance companies, credit unions, mutual and pension funds, other finance companies, and real estate trusts. Figure 2: A pie chart showing financial intermediary asset market share for the year ending 2000

Source courtesy: Federal Reserve flow of Funds released Banks' assets have grown in recent decades in absolute terms; however, banks have tended to lose market share to even faster-growing intermediaries such as pension funds and mutual funds. Currently, banks still account for a significant percentage of over twenty-three of all the assets of different financial intermediaries at the end of the year 2000. Risk Management Standards created due to Anti-Money Laundering Regulations The American government enacted and implemented the Bank Secrecy Act and the USA Patriotic Act to control and mitigate money laundering and terrorism financing. The introduction of several risk management standards introduced in the banking sector managed to eliminate the risk of illegal transfer of money in and out of the economy via other complex and online transactions. The banks that seek to establish businesses have to meet risk management standards enacted in the regulations. The Federal Reserve Board makes a comprehensive review of the foreign banking agencies and ensures compliance with the anti-money laundering regulations. Figure 2: A graph showing bank regulatory capital risks from the year 1998 to 2000

Risks and their management in banking Bank risks are the potential loss incurred by banks due to their occurrence. The banking sector's critical risks include credit risk, risk of interest rate, market or liquidity risk, and operational risk. Credit risk affects potential bank borrowers who fail to meet the obligations per the agreed terms. Banks' exposure to credit risk by banks is the major source of banks' problems since they are derived from loans and off-balance-sheet activities, banking, and trading books (Saunders, 2014). Consequences of not adhering to the standards outlined by the Federal Reserve System The impact of ignoring the Federal Reserve System is a required standard of regulation. It is deemed the regulator that aids in oversight and supervision of the bank system by ensuring that banks and financial institutions comply and adhere to the anti-money laundering guidelines and policies (Kidwell et al.2016). The repercussions that encounter the financial institutions that fail to adhere to the set and outlined standards are deemed suspensions accompanied by revocation of charters and licenses. Additionally, the operations associated with legal action are always conducted and initiated to act against the unaccepted bank agencies, which are always regulated through fines or suspensions, thereby controlling their transactions. Banks and other financial institutions are always expected to meet the set and outlined standards that assure them of acquiring integrity and operational efficiency gained in the marketing sector. The regulatory system ensures that every stakeholder obtains the market confidence which is required in the market sector. Therefore, the regulations are always put in place to control the transaction between investors and bankers, leading to preventions of thefts and fraud actions within the marketing sectors. 

	The regulatory body is also concerned with maintaining a stable market operation in the U.S.'s varying economic state level since it controls the transactions of the investors who involve themselves in the production of goods and services.  Most of the regulatory concerns are based on the guidelines and principles that act as the law that governs the financial transactions activities in the market economy systems, leading to the efficiency of the operations (Saunders,2014). The Federal Reserve board is always concerned with checking the foreign trade statistics that determine the international trade distribution by verifying transactions in the internal market; hence, to some extent, they control the trading operations between the trading partners. The regulatory body is aids in determining the nominal and real prices in the market sector; hence it can be used as a descriptive analysis in understanding the impacts of regulation in the global and asymmetric trade exposure.

The Graph is showing how Federal Reserve System has been controlling the Exchange Rate as a regulatory body. The simple Line Graph shows U.S. Dollar against Euro Exchange Rate.

Management considering the Unregulated Leverage and Liquidity Levels of Banks and financial institutions Bank management committees are always concerned with unregulated leverage activities and determining the liquidity levels of business market firms or production companies. Regulation is considered by most firms in the production and marketing activities would experience difficulty managing the prevailing unregulated leverage activities and levels of liquidity in accordance or effectively (Weber, Feltmate et al.2016). Subsequently, efficient mitigation that results from risks is mainly controlled by gathering financial information that collaborates with banks and the financial sector regulations. Therefore, the banks and financial institutions' managers are required to contribute a lot in regulating actions of scrutinizing the prevailing risks through establishments of the long-lasting solutions of the risks. Most of the company's managers are deemed not to engage themselves substantially in risky and illegal company's activities (Haini, 2019). Thus, it makes the banks and financial institutions form and draw assumptions that are always concerned with leverage that is employed as an indicator of systemic risk management. Provided that activities associated with leverage are considered to be accompanied by uncertainty which leads to liquidity fears. Consequentially, the banks' managers always prefer when the firms' regulation is deemed to be banking. Thus, abandon policies with those of the firms' managers encouraged to conduct regulative measures that enhance the global market's financial stability. Bank management is always in check of unregulated leverages and liquidities to improve economic growth. In the U.S., the financial institutions consider economic growth to measure the increased wages and improvement of living standards, which is deemed a measure of Gross Domestic Product that is regarded as accelerating the consumption of goods and services. The economy's growth symbolizes the reduction of the string of scarcity described as a condition of insufficient resources with unlimited needs (Al-Busaidi, & Al-Muharrami, 2020). Financial strategies' management stimulates economic growth since customers in the trading market involve the opportunity cost due to the best alternative decision when choosing the products and their prices in the market. Banking sectors act as the productivity-boosting factors by engaging the human and physical capital to determine the economic growth through high financial rates, thereby leading to productive activity. The central bank acts as an institution that provides incentive structures in the economy. Therefore, it determines the growth of the economy in many countries. Federal Reserve Board uses the regulatory measures to determine the consumer price index, mostly in urban areas in the U.S. This helps the business banks determine the average change when determining the monthly change and variation in the market price, hence influencing consumers' buying habits (Dinçer, & Hacioglu,2013). This forces Federal Reserve Board to enforce policies that may lower the interest rates to increase the consumer's demand by increasing the product's consumption rate by consumers in the market. In the U.S, consumers are considered to be determinants of the price of the products in the market; they are the target customers who demand the products in the market. The Graph show Commercial Industrial Loans against Monthly Seasonal Commercial and Industrial Loans.

The consumers' decision is used to determine inflation and deflation in the market since their confidence in the product dictates its price. Graph showing Consumer Index against the monthly frequencies.

Tools that are employed when managing the prevailing risks related to unregulated leverage and liquidity levels Banks and financial institutions always prefer to engage the tools that can be used to manage the prevailing risks related to unregulated leverage and Liquidity levels when handling numerous economic risks, which accompany experiences when managing the regulations considering transactions in the trading activities (Kidwell et al.2016). The available tools like redemption notices are always adopted to increase the ability to create favorable situations to control the prevailing risks. The general statements are considered essential since they provide relevant information to bank managers to acquire the cash required to pay redemption existing in the market sectors. Additionally, the swing pricing mechanism is employed to ensure that the first mover's preferred advantage is accomplished. As a result, the agency provides that the present investors are willing to support the market sectors' liquidity cost . The investors' preferred tools in measuring the prevailing risks of the management on the related unregulated leverage and liquidity levels also consider the inflation rate, which is accompanied by the significance of money growth. The financial institutions and banks consider the Federal Reserve Systems as regulators of the financial market economy by controlling the nominal and real prices; hence, they are deemed to consider the high inflation caused by the increase in the product's cost as a result of scarcity or increase in demand (Weber, Feltmate, et al.2016). Considering the state of the market, which acts as a measure of the country's economic level, the financial institutions are always concerned about inflation in the market, which is determined by the inflation indices by comparing their state during different periods of the market year. Inflation expectations are always conducted by determining the difference between the numerous yields of the nominal treasury securities and the inflation-adjusted treasury securities. The outcome measures the expected financial market average inflation rate, which is considered over ten years. The banking sector is always concerned with prioritizing the inflationary indices when determining the increase in price, which is always considered the primary influence of consumers' behaviors in the market. The forecasted inflation always aids the financial institutions in determining the regulatory measures which are supposed to be undertaken by the business companies when conducting transactions in the market sectors. The Federal Reserve is always concerned with the regulatory activities on how to control the Consumer payment choice, which is deemed to be the best way of controlling unregulated and leverage levels of both the investors and traders in the market economy. Mostly the banks and financial institutions are always determined to influence the availability of cash to the citizens, therefore, leads to the need for controlling the unregulated actions in the market sector (Haini, 2019). The Graph shows Business Loans against Monthly frequencies and Observation date.

The analysis indicates that a quarter of the cash transactions are primarily conducted on food purchase transactions. The resulting cash transactions may cause the rise of unaccepted cash, thereby leading to inappropriate financial practices.

Conclusion Generally, banks and financial institutions consider the federal reserve board when conducting the regulatory measures used to determine risk management roles. The regulations also believe the standard pertained to risk management and their significance when dealing with money laundering activities. The repercussions are highlighted in case a business company ignores the criteria outlined by the Federal Reserve body. The financial institutions through Federal Reserve System are also concerned with the management of unregulated leverage and liquidity levels by controlling the transactions in the market between the business company and both investors and customers in the market economy. The available tools that can be used to manage risk management are also involved in increasing efficiency in the market. Banking sectors use regulation to determine inflation, Gross Domestic Product, change in the nominal and real price wages. Eventually, it is concerned with lowering the interest rates, choosing the consumers' confidence in the market economy.

Reference Kidwell, D. S., Blackwell, D. W., Sias, R. W., & Whidbey, D. A. (2016). Financial institutions, markets, and money. John Wiley & Sons. Saunders, A. (2014). Financial institutions management. Macmillan Press. Weber, O., & Feltmate, B. (2016). Sustainable banking: Managing the social and environmental impact of financial institutions. University of Toronto Press. Haini, H. (2019). Examining the relationship between finance, institutions and economic growth: Evidence from the ASEAN economies. Economic Change and Restructuring, 1-24. Al-Busaidi, K. A., & Al-Muharrami, S. (2020). Beyond profitability: ICT investments and financial institutions performance measures in developing economies. Journal of Enterprise Information Management. Dinçer, H., & Hacioglu, Ü. (Eds.). (2013). Globalization of Financial Institutions: A Competitive Approach to Finance and Banking. Springer Science & Business Media.

relevance of a certain header phrase[edit]

"(from Greek prefix mikro- meaning "small" + economics)" is this really necessary? one would think that was already implied, and this isn't even close to a proper etymology Ronan.Iroha (talk) 06:46, 26 April 2021 (UTC)[reply]

Micro economy[edit]

Male 37.111.222.118 (talk) 13:37, 24 November 2022 (UTC)[reply]

Retrieved from "https://en.wikipedia.org/w/index.php?title=Talk:Microeconomics&oldid=1193953644"