Microeconomic Concepts Research Articles

ТЕОРЕТИЧЕСКАЯ ЭКОНОМИКА КАК ФУНДАМЕНТ УПРАВЛЕНИЯ ОРГАНИЗАЦИЯМИ ИНВЕСТИЦИОННО-СТРОИТЕЛЬНОГО КОМПЛЕКСА РОССИИ

The paper is devoted to the theoretical and methodological foundation of management of the Investment and Construction Complex (ICC) of Russia. The result of the research is to substantiate the organic connection of the basic concepts of political economy and microeconomics with the Theories of Industrial Markets and Organizations, management of construction and design companies. The conditions for realization of the GNP by Quesnay and Marx justify the place of ICC in the expanded reproduction of GNP. The Ith division includes the construction of industrial, transport, and infrastructure facilities, the production of structures, building materials, and construction equipment. In the IIth – civil, socio-cultural, and housing construction. The ICC, interacting with all sectors of the economy, is part of the Inter-industry Balance created by the Ministry of Economic Development together with the Ministry of Construction. The Ministries and the Bank of Russia are adjusting the financial model of the construction industry, which includes funding from the state budget at all levels, the banking system of mortgage lending, private capital and household investments. Among the microeconomic foundations of ICC management, there is shown the role of the concept of supply and demand in the behavior of construction organizations in the oligopolistic and competitive segments of the profile market. The market for the design of industrial and civil facilities, unlike construction and banking, is competitive. With this in mind, the provisions of A. Marshall on the functions of supply, demand, its elasticity and J. Robinson for markets of perfect and oligopolistic competition are confirmed. Financial management of a construction and design companies, their optimal output volume and maximum profit are based on a microeconomic justified equilibrium condition of the firm. The fundamental principles of microeconomics methodologically underlie the management decisions of construction and design organizations.

Proficiency Level and Challenges in Economics of Grade 10 Students in Selected Public Schools in Central Philippines

Aims: This paper assessed the level of proficiency in Economics of Grade 10 students in selected public schools in the Philippines during the school year 2022 in the areas of basic concepts of Economics, microeconomics, macroeconomics, and sectors of the economy and its policies when taken as a whole and grouped according to sex and grades. It also identified the challenges encountered by students in learning Economics. Lastly, it determined the difference in their proficiency level in Economics when grouped into demographics.
 Place and Duration of Study: The study was conducted among Grade 10 junior high school students in Central Philippines during 2022.
 Study Design: The study utilized the quantitative design, particularly the descriptive-comparative approach.
 Methodology: The study was responded to by 304 stratified randomly sampled students using a validated and reliability-tested researcher-made test questionnaire and checklist. In assessing the study, it utilized the scale in ascending order: beginning, developing, approaching proficiency, proficiency, and advanced. In data analysis, mean, standard deviation, frequency count, percentage, rank, Mann-Whitney, and Kruskal Wallis were used.
 Results: Generally, the student's proficiency level in Economics (M=24.25; SD=6.43) was rated as approaching proficiency. The low areas with approaching proficiency ratings that need improvement are microeconomics (M=5.33; SD=2.02), macroeconomics (M=7.58; SD=2.84), and sectors of the economy and its policies (M=3.82; SD=1.71). Regarding the demographics, according to sex, the Economics proficiency of female (M=25.18; SD=6.11) and male (M=23.22; SD=6.64) students was approaching proficiency. Meanwhile, the student's proficiency level with a grade of 90-100 (M=27.02; SD=5.82) was proficient compared to other grades, 85-90 (M= 23.18; SD=6.64), 80-84 (M= 22.05; SD= 5.58), and 75-79 (M=22.17; SD= 3.66) which were approaching proficiency. On the one hand, the findings showed a significant difference in their proficiency level in Economics when grouped according to sex [U=9547.5, p=0.010] and grades in Economics [χ2(3) =31.377, p=0.000]. Lastly, grade 10 students encountered challenges in learning Economics regarding teacher, student, learner environment, resources, facilities, and subject factors.
 Conclusion: The findings imply a continuous improvement in instruction and the importance of programs and activities that encourage acquiring and developing proficiency in Economics. With the sustainable improvement in instruction intact, the student's proficiency in Economics is ensured.

Equivalence scales for continuous distributions of expenditure

Research background: In the actual sizable populations of households, the standard microeconomic concept of equivalence scales is intractable since its necessary condition of equality of household welfare levels is unlikely to be fulfilled. Purpose of the article: This paper aims to develop a concept of an equivalence scale, which can be suitable for continuous distributions of expenditures in the population. Methods: Using household welfare intervals, we get the random equivalence scale (RES) as the ratio of expenditure distributions of the compared populations of households. Findings & value added: We derive the parametric distribution of RES for the lognormal distributions of expenditures. The truncated distribution of RES is applied to account for possible economies of scale in the household size. A society?s inequality aversion can be helpful when selecting a single equivalence scale. We estimate RES for Poland using microdata on expenditures and subjective assessments of household welfare intervals. The estimated equivalence scales turned out to be very flat and dependent on welfare.

An income-based approach to modeling commuting distance in the Toronto area

The purpose of this article is to propose a novel model of the effects of changes in shelter and driving costs on car commuting distances in the overheated Toronto housing market from 2011 to 2016. The model borrows from theoretical concepts of microeconomics and urban geography to examine the Toronto housing market. Using 2011 and 2016 Census data for census metropolitan areas (CMAs) and census agglomerations (CAs) in Southern Ontario and computed driving costs, the model of car commuting distance is based on variables of allocation of monthly household income to monthly shelter costs and driving costs as a function of the car driving distance to Toronto. Using this model, we can predict the effect on car commuting distance due to changes in any of the variables. The model also offers an explanation for communities of Toronto car commuters beyond a driving radius that we might expect for daily commuting. The model confirms that increases in shelter costs in the Toronto housing market from 2011 to 2016 have forced the boundaries of feasible housing locations outward, and forced households to move farther away, thus increasing car commuting distance.

A REVIEW STUDY OF ECONOMICS ANALYSIS IN ENGINEERING PROJECTS

Engineering economics, previously known as engineering economy, is a subset of economics concerned with the use and application of economic principles in the analysis of engineering decisions. As a discipline, it is focused on the branch of economics known as microeconomics in that it studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources. Thus, it focuses on the decision making process, its context and environment. It is pragmatic by nature, integrating economic theory with engineering practice. But, it is also a simplified application of microeconomic theory in that it avoids a number of microeconomic concepts such as price determination, competition and demand/supply. As a discipline though, it is closely related to others such as statistics, mathematics and cost accounting. It draws upon the logical framework of economics but adds to that the analytical power of mathematics and statistics. Engineers seek solutions to problems, and the economic viability of each potential solution is normally considered along with the technical aspects. Fundamentally, engineering economics involves formulating, estimating, and evaluating the economic outcomes when alternatives to accomplish a defined purpose are available. The study includes an introduction to the application of economic techniques to the evaluation of design and engineering alternatives, cash flow concepts, interest factors, comparison of alternatives, benefit - cost analysis, and conclusions of the study. One of the objectives of the economic analysis in engineering projects is the good management which consists primarily of making wise decisions; wise decisions in turn involve making a choice between alternatives. Engineering considerations determine the possibility of a project being carried out and point out the alternative ways in which the project could be handled. Economic considerations also largely determine a project's desirability and dictate ho

A New Measure of Complementarity in Market Basket Data

Modern IT systems collect detailed data on each activity, transaction, forum entry, conversation and many other areas. The availability of large data volumes in the business, industry and research fields opens up new opportunities for the empirical verification of various economic theories and laws. The analysis of big datasets in turn allows us to look at many issues from a new point of view and see the dependencies that are otherwise difficult to derive. In this paper, we propose a new measure for dependencies between goods in market basket data. The introduced measure was inspired by the well-known microeconomic concept of complementarity. Due to its similar properties to those of complementarity, the new measure was called basket complementarity (b-complementarity). B-complementarity not only measures the strength of dependencies between goods but also measures the direction of these dependencies. The values of the proposed measure can be relatively easily calculated using market basket data. This paper also presents a simple example illustrating this new concept, areas of possible application (e.g., in e-commerce) and preliminary results of searching for goods that meet the criteria of basket complementarity in real market basket data.

A New Measure of Complementarity in Market Basket Data

Modern IT systems collect detailed data on each activity, transaction, forum entry, conversation and many other areas. The availability of large data volumes in the business, industry and research fields opens up new opportunities for the empirical verification of various economic theories and laws. The analysis of big datasets in turn allows us to look at many issues from a new point of view and see the dependencies that are otherwise difficult to derive. In this paper, we propose a new measure for dependencies between goods in market basket data. The introduced measure was inspired by the well-known microeconomic concept of complementarity. Due to its similar properties to those of complementarity, the new measure was called basket complementarity (b-complementarity). B-complementarity not only measures the strength of dependencies between goods but also measures the direction of these dependencies. The values of the proposed measure can be relatively easily calculated using market basket data. This paper also presents a simple example illustrating this new concept, areas of possible application (e.g., in e-commerce) and preliminary results of searching for goods that meet the criteria of basket complementarity in real market basket data.

Teaching Macroeconomics Through Music

By using popular and relatively recent songs, this paper demonstrates music as a useful form of media to teach macroeconomic concepts, such as economic growth, unemployment or inflation. While economists and educators have explored the relationship between economics and music, the focus has been on microeconomic concepts rather than macroeconomics. The purpose of this article is to establish a database to connect music directly to course content. The database provides educators a sample set of relevant lyrics, along with a list of core macroeconomic concepts to use in the classroom. This paper shows how instructors can use music as a pedagogical tool, along with suggested discussion questions.

Конкурентоспроможність та стратегічне позиціонування морських портів

Thanks to the development of world trade, more than two-thirds of the world's total cargo depends on maritime transport. Maritime transport and ports play an important role in the sustainable development of the global economy. Currently, as international transshipment ports, ports are evolving from conventional retail terminals to containerized distribution logistics centers (hubs). Undoubtedly, the shipping and port industries are directly related to the global economy. The ports are the main carriers and information exchangers with the outer regions. In addition, the port economy has become an important lever for promoting regional economic development. In order to ensure a port's competitive position within a certain range, many port administrations and stakeholders have measured competition performance based on microeconomic concepts such as market shares and annual growth rates among competitors. However, in past years it can be seen that the growing attention to the social responsibility of the port, that is, the impact of port operations and activities on the environment, has often attracted public attention. The port is also facing great pressure on the results of its social responsibility. Such a satisfactory capacity or growth rate is insufficient to measure the competitive position of ports in today's environment. Ports or interested parties may have additional charges for environmental impacts, such as emissions, water pollution, noise, etc. to achieve sustainable port development. Ports with excellent environmental performance and high social reputation are likely to have a competitive advantage. There are various methods for determining their competitiveness, especially for container ports. As a rule, a lot of literature indicates that the key factors affecting the competitiveness of a port, such as port capacity, productivity, quality of service, accessibility of inland areas and reputation. However, there is also evidence that the public is increasingly focusing on environmental issues of the port, which leads to much more negative externalities for society. One of the major environmental impacts is exhaust gas emissions (air pollution), which are mainly caused by vehicles in the port industry. The development trends of the port and shipping industries are associated with the spread of globalization and containerization. Accordingly, the competitive environment is becoming increasingly tough for all participants in the maritime transport market. In such conditions, in order to be competitive, it is necessary to reduce negative externalities and pay more attention to environmental protection. Environmental issues directly affect both global economic growth and the competitiveness of ports.

GMOs and Economic Development in Peru: A Myth or an Opportunity?

Peru has a 10-year ban on genetically modified (GM) crops and food that was approved by the Peruvian congress in 2011. Is it scientifically justified or is it a cause and effect fallacy that will make Peru fall behind in taking advantage of this technology and its potential benefits to everyone else in the economy? In order to answer this question, a literature review was carried out to examine the three most commonly used arguments against genetically modified organisms (GMOs) by farmers and all those related to the agriculture industry, reaching the conclusion that they are not one hundred percent plausible. Further research showed the multiple, potential economic benefits that GM seeds could bring about to Peru, which are related to increased labor productivity, the development of human capital, and the expansion of renewable energy sources and its implications for trade and employment – the environmental and health benefits of GMO varieties are also discussed. This paper elaborates on such matters by applying different macro and microeconomic concepts, i.e., market structures and competition, the theory of the firm, and scarcity, among others; and provides insights about the different socio-economic realities present in Peru and possible ways to improve them.

A Strategy to Support Efficient Development and Use of Innovations in Personalized Medicine and Precision Medicine.

This analysis addresses an important policy question: "What are potentially transformative strategies and methods to define and measure value at all levels of decision making that are aligned with personalized medicine/precision medicine (PM/PrM)?" To approach this question, we build on our previous work with PM and recent work as members of ISPOR's Special Task Force on Value Assessment Frameworks. We focused on 3 key challenges: (1) the need for a broader concept of value for PM/PrM; (2) the development of appropriate concepts and methods for measuring and splitting the innovation reward for PM/PrM; and (3) the application of this expanded concept to align value assessment in the hierarchy of related decision contexts, from formulary inclusion and value-based pricing to shared patient-provider decision making. Our working assumption was that the goal of policy affecting PM/PrM technologies should be to promote "dynamic efficiency"-the optimal development, adoption, and use of these technologies. For this purpose, we laid out 6 basic cross-cutting policy principles. First, rewards for innovation should be value-based and flexible over time and across indications as new evidence emerges. Second, the concept of value should be based on the microeconomic concept of willingness to pay and should include, at its core, the value of health gain-in terms of the length and quality of life- but also going beyond this to include other uncertainty-related elements. Third, innovation rewards should be modifiable given new real-world evidence and knowledge. Fourth, the scientific information embedded in PM and PrM technologies is a global public good that should be financed globally through differential pricing. Fifth, reward systems need to recognize that the diagnostic technologies that make PM and PrM possible are technically "economic complements." Sixth, splitting the rewards among complementary inputs is arbitrary in a static sense but matters dynamically. For PM/PrM value assessment, we argue for including the "value of knowing"; the need for indication-specific pricing; the importance of updating the economic evaluation and pricing over the product life cycle; addressing the new challenge posed by next-generation sequencing and high-cost combination therapies; and aligning value metrics across different decision contexts based on health benefit and patient-centered utility. DISCLOSURES: No previous outside funding supported this policy analysis. The authors have nothing to disclose. The authors are grateful to have received first place in the PhRMA Foundation-Personalized Medicine Coalition 2018 Value Assessment Challenge Award for this work.

Measuring the impact of enterprise integration on firm performance using data envelopment analysis

Today, with rapidly developing technology and changing business models, organizations face rapid changes in both internal and external environments. To be able to rapidly respond to such changing environments, integration of software systems has become a top priority for many organizations. However, despite extensive use of software systems integration, quantitative methods for estimating the business value of such integrations are still missing. Using Data Envelopment Analysis (DEA) and the microeconomic concept of marginal rates, this study proposes a method for quantifying the effects of enterprise integration on the firm performance. In the paper, we explain how DEA can be used to evaluate the marginal benefits of enterprise integration. Our proposed method is to measure and compare the productive efficiency of firms using enterprise integration, specifically by relating the benefits produced to the resources consumed in the process. The method is illustrated on data collected from 12 organizations. The defined method has a solid theoretical foundation, eliminating the need for a priori information about the relationship between different measures. Furthermore, the framework could be used not only to quantify the business value of enterprise integration, but also to estimate trade-offs and impacts of other subjective managerial goals on the results. The major limitation of the proposed method is the absence of a comprehensive theory relating IT architecture changes to organizational outcomes. The underlying model is strongly dependent on the relevancy and accuracy of the included variables, as well as number of data units, introducing uncertainties to the outcomes of the model.

大学生の経済リテラシーの中日比較 : ミクロ経済学の概念と理論に関して(投稿原稿(査読付))

大学生の経済リテラシーの中日比較 : ミクロ経済学の概念と理論に関して(投稿原稿(査読付))

O “modelo de agência” e os incentivos econômicos à prevenção dos acidentes de trabalho

Resumo: Neste artigo faz-se uma conexão do “modelo de agência” com o direito fundamental à prevenção de acidentes de trabalho, sob a ótica da Análise Econômica do Direito. A partir de uma abordagem da necessária efetividade dos direitos sociais relacionados à redução dos riscos inerentes ao trabalho, afirma-se a prevenção como um direito humano e fundamental, ao mesmo tempo que se mostra que os acidentes ainda ocorrem com elevada frequência no Brasil e no mundo, o que evidencia uma realidade desrespeitosa ao princípio da precaução. No estudo trata-se, ainda, sobre os custos sociais decorrentes dos acidentes de trabalho e os incentivos econômicos atuais à escolha da prevenção, enfrentando conceitos da microeconomia e noções de custos com prevenção e reparação, além dos benefícios com a adoção de medidas preventivas. Finalmente, apresenta-se o problema da agência, que relaciona o papel do “agente” empregador e do “agente” empregado em face da sociedade e a contribuição desse modelo para estimular a escolha pela prevenção, atribuindo a obrigação do monitoramento do empregado ao empregador, que é quem pode executá-lo de maneira mais eficiente.Palavras-chave: Direitos fundamentais. Acidente de trabalho. Prevenção. Análise econômica do Direito. Modelo de agência.

Introducing economics to millennials

The vast majority of first-year undergraduate students are millennials, who have different learning habits compared with their previous cohorts. Thus, teaching foundational microeconomic concepts to millennials could be very challenging. This paper proposes an attractive method to improve millennials’ learning experience by projecting short YouTube movie clips (3minutes on average) in the classroom. The clips were not specifically uploaded to YouTube for a microeconomics lecture; they were already available on YouTube as movie scenes. The objective of the apparent absence of connection between the clip and the lecture is to inspire students’ interest, which helps to involve millennial students in the lecture by giving them a real-world emphasis and they can improve their understanding. This short break in the lecture contributes to engage millennials by giving them a focus using social media. The results of a student self-assessment survey support the expectations of the literature that the use of YouTube clips would improve students’ assimilation of economic concepts by helping them realize how economics is applicable to the real world, enhancing their internalization of those notions, and recognizing the relevance of economic ideas to their lives. Links to be used by other instructors are provided.

Basic theoretical foundations and insights on bilevel models and their applications to power systems

Decision making in the operation and planning of power systems is, in general, economically driven, especially in deregulated markets. To better understand the participants’ behavior in power markets, it is necessary to include concepts of microeconomics and operations research in the analysis of power systems. Particularly, game theory equilibrium models have played an important role in shaping participants’ behavior and their interactions. In recent years, bilevel games and their applications to power systems have received growing attention. Bilevel optimization models, Mathematical Program with Equilibrium Constraints and Equilibrium Problem with Equilibrium Constraints are examples of bilevel games. This paper provides an overview of the full range of formulations of non-cooperative bilevel games. Our aim is to present, in an unified manner, the theoretical foundations, classification and main techniques for solving bilevel games and their applications to power systems.

The Visual Decoding of the “Wheel of Duality” in Consumer Theory in Modern Microeconomics: An Instructional Tool Usable in Advanced Microeconomics to Turn “Pain” into “Joy”

Duality is the heart of advanced microeconomics. It exists everywhere throughout advanced microeconomics, from the beginning of consumer theory to the end of production theory. The complex, circular relationships among various theoretical microeconomic concepts involved in the setting of duality theory have led it to be called the "wheel of pain" by many graduate economics students . Put simply, the main aim of this paper is to turn this "wheel of pain" into a "wheel of joy". To be more specific, the primary purpose of this paper is to graphically decode the logical, complex relationships among a quartet of dual functions which present preferences as well as a quartet of demand-related functions in a visual manner.

Economic Values and Resource Use

Absolute decoupling of GDP growth from resource use implies that economic output can be increased without simultaneously increasing input. The essential meaning of this proposition is that the economic values that represent the GDP can be realized by increasing resource efficiency. Given that the GDP is first and foremost a measure of economic activity rather than welfare the possibility of absolute decoupling is theoretically limited. This paper demonstrates theoretically and empirically that economic values at the macroeconomic level are fundamentally determined by the use of production factors, primarily labor and physical capital. Technical innovations or efficiency gains increasing utility without raising the costs of production do not add to the GDP unless they stimulate investments in physical capital. Hence the neoclassical notion of productivity is only found to be relevant as a microeconomic concept. In practice, GDP growth is mostly explained by capital accumulation and a key question is whether or not capital accumulation can be decoupled from the use of materials and energy. This will determine the possibility of decoupling of GDP growth from resource use and environmental impact. Alternative measures of progress focusing on welfare rather than economic activity are more likely to achieve absolute decoupling.

İktisat Öğretiminde Deneysel Yöntem: Sınıf Deneyleri ve Uluslararası İktisat Uygulamaları

In general, economics courses are taught to the students at a fairly abstract level and it has a negative effect on student’s attitudes towards economic courses. But the courses can be completed with classroom experiments that students make decisions and interact with. Classroom experiments give the students the opportunity to explore on their own basic economic concepts by putting them in the role of economic decision makers and the chance to see the appropriateness of theories given in the books. Indeed, the studies on classroom experiments showed that with classroom experiments students are more interesded in economic courses and more successful in the exams. However, it is more difficult to reflect international economics concepts in classroom experiments than micro-economic concepts. As a result very few classroom experiments exist in this area. These classroom experiments mostly focused on the operation of comparative advantage, the importance of specialization in trade and exchange rate. The aim of this study is to introduce the classroom experiments and to show its applications on international economics.

Does investment in irrigation technology necessarily generate rebound effects? A simulation analysis based on an agro-economic model

Investing in more efficient irrigation technology is usually regarded as a means to reduce the use of water by irrigated agriculture. However, some authors report that the introduction of irrigation systems that apply water more uniformly may actually increase water catchment depletion: the so-called ‘rebound effect’. In this paper a simple model that combines irrigation, agronomic, and microeconomic concepts is used to systematically analyze the conditions under which improved irrigation application uniformity may lead to increased water use and/or consumption. The analysis is illustrated with examples from the experience with irrigation modernization in Spain. Water demand (the value of marginal water productivity) becomes inelastic as the irrigation application uniformity increases. The increase in water depletion due to the introduction of more uniform irrigation systems is insignificant if land is limited and farmers optimize their profit. If land is not a limiting factor, new water abstractions are likely to occur, potentially leading to a vicious circle in which irrigated land expands while water resources become overexploited. This cycle tends to slow down as irrigation application uniformity increases. More accurate water accounting is suggested as an instrument for controlling water depletion complementary to investing in irrigation efficiency when water conservation at the basin scale is the main objective.