Microeconomics For Dummies - UK, UK Edition
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Microeconomics comes complete with its own set of vocabulary, which can sometimes be confusing. To get a true feel for microeconomics, three key terms must be defined and understood. Those terms are:

  • Utility: Utility is the value people get from making a choice. You can find out how much utility a consumer gains by working it out from the choice they make. Consumers optimise — get the best level of utility they can, given that they have to do so within a budget constraint.

  • Profits: Profits are what’s left over from a firm’s revenue once all relevant costs have been accounted for. Firms try to make as much profit as they can, and they do this by producing until marginal revenue — the revenue gained from adding an extra unit — equals marginal cost - the cost of producing that extra unit.

  • Markets: Markets are places where consumers and firms trade. In a model of a market, consumers optimise their utility and firms try to maximise their profits. The price and quantity in the market will be the affected by lots of things — from the number of firms in the market to the income, or valuations of consumers.

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About the book authors:

Peter Antonioni is a senior teaching fellow at the Department of Management Science and Innovation, University College, London, and coauthor of Economics For Dummies, 2nd UK Edition. Manzur Rashid, PhD, is a lecturer at New College of the Humanities, where he covers second year micro- and macroeconomics.

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