Subject and method of economic theory. Microeconomics and Macroeconomics
The marginal rate of transformation (MRT) shows how much you need to reduce in order to get an additional unit of x. \u003d MRI is a quantitative expression of the opportunity cost x.
The line of the graph is concave with respect to the origin of coordinates - with the growth of x, the limiting rate of transformation increases. This dependence reflects the increase in the cost of producing each additional unit x. Resources for the production of x and y are qualitatively heterogeneous, there are resources specialized for x and y. As output x increases necessary resources become scarce, more sophisticated technology is required to process a less suitable resource = production costs x increase. Thus, the main problem of the economic system is the problem of choice. Its essence lies in the fact that if each factor used to meet the needs is limited, then there is always the problem of alternative use of it and the search for the best combination of factors of production, and so, the problem of choice arises in conditions of limited resources and faces the whole society. Efficiency.
The economic efficiency of the economic system is a state in which it is impossible to increase the degree of satisfaction of the needs of at least one person without worsening the situation of another person. But if there is a way to improve your position without harming anyone, then it is pointless (inefficient) to pass by such an opportunity. This state is called Pareto efficiency.
Ticket number 5. Opportunity cost or costs of rejected opportunities.
This is what you have to give up in order to get what you want. It is not for nothing that the formation requires the general expenditure of money capital.
The specifics of the turnover of fixed capital:
1) fixed capital serves several production cycles over a long period of time;
2) fixed capital is subject to gradual physical wear and tear, but at the same time it retains its physical form and productivity for a long time;
3) the cost of fixed capital is transferred to new T gradually, in parts as it wears out and is included as an element of costs in the price of T in the form of depreciation charges.
Motion capital cost fixed capital is called depreciation. O - the initial cost of fixed capital; n is the number of years of service until complete wear and tear.
Am. fund = Agod...
The first A deductions are included as an element of costs in the company's revenue from the sale - finished products. Therefore, it is necessary to take the appropriate amount of ready-made A deductions from the cash proceeds and send them to the depreciation fund, which is formed by accumulating annual A deductions. The function of the sinking fund is to ensure the effective demand of capital for the purchase of new equipment by the end of their service life. Depreciation is the process of movement of capital value, when there is a bifurcation of the initial cost into A deductions and residual value ().
………= ………Agod…..
Norm A - annual deductions of the initial cost.
According to this formula, a linear method is used to calculate the depreciation rate, which gives uniform write-offs of the cost of fixed capital over the years:
1) linear method (uniform write-off): Agod = Ka Uo;
In practice, there are complex calculation methods. accelerated depreciation carried out to protect the interests of the enterprise from obsolescence equipment under the influence of technological progress. It allows you to provide a depreciation fund in the first years of service.
Ticket number 7. Economic system. Ways to coordinate economic choice. transaction costs.
The English writer Bernard Shaw at one time, not without reason, in my opinion, said: "Economy is the ability to make the best use of life." Indeed, the subject economic theory- this is the whole set of relations between the participants in social production in deciding what, how and for whom to produce. Consequently, economic theory is closely connected with many other sciences, and above all such as philosophy, psychology, history, demography, statistics, mathematics, and jurisprudence. And the economic theory itself, as we have already noted, is the methodological basis for all economic education.
Usually at this point I give students a sad, but very instructive example from my practice. Sad, because a pretty girl was crying there, a student of the Yaroslavl branch of the All-Russian Correspondence Institute of Finance and Economics, where I taught part-time in the mid-1990s. Why was she crying, poor thing? After all, at first everything was very fun: the topics of term papers on economic theory were distributed, the girl saw the topic of the monetary system and politics, “clung” to it, not wanting to give it to anyone, and was very glad that she got the desired topic. Still: it turns out that her mother worked in a commercial bank and promised her beloved daughter professional magazines dedicated to intra-bank management, and other information of this kind. The girl logically combined what she received in the required sequence and expected a good mark for her work. And suddenly a message from a ruthless teacher about an unsatisfactory assessment, because, although everything is written correctly, but not according to economic theory, but to intra-bank management.
Economic theory on this topic should not explore what exactly to do inside the bank (after all, it would be “a twig, a stalk, and not the root from which they grow), but, looking at the entire banking system of the country “from above, from the side”, answer the question is why, for example, in Western countries before the current crisis commercial banks gave start-up entrepreneurs long-term loans at an interest rate that was two to three times lower than the profit from the business for which these loans were taken. And in our country, as you know, the credit situation for small and large businesses was different. But mommy's magazines and girl's term paper did not describe anything like that: their descriptions were in the "stalk", but they should have been in the "root".
But without the root you will not understand the essence of the stem. It is no coincidence that the American professor, Nobel Prize winner in economics Paul Samuelson called economic theory the queen of sciences. A.S. Pushkin, who was instructed by Nicholas I to think over and propose the principles of education for the elite youth of the nobility, called economic theory one of the sciences that must be studied.
What does economic theory study, what is its subject? From the history of economics and economic doctrines You already know that even this most basic question gets different answers in different branches of economics. First of all, this applies to the Marxist political economy and the neoclassical concept (economics). For example, Marxist political economy considers production relations, that is, relations between people regarding the production and appropriation of material goods, to be the subject of economic theory. And economics, neoclassics considers the subject of economic theory not production, but the exchange of goods, the analysis of the market economy.
Let us note in this connection that Marxist political economy was studied in the universities of the Soviet Union, and since 1992 the state standards of the Russian Federation demanded to study economics. But after all, studying only how to trade and not studying where the goods come from is a one-sided extreme, contrary to world practice.
It is no coincidence, as the journalist V. Kostikov reasonably notes on the pages of the Arguments and Facts newspaper, “The Kremlin and the White House in their strategy continue the liberal policy laid down by the government of Y. Gaidar. Not only that: this policy is, by a number of fundamental features, more right-wing and more liberal than the economic policies of the leading European countries. For many years, Russia has maintained a flat tax rate (that is, the rich and the poor pay the same 13% to the treasury). In the most liberal England, meanwhile, a 40% tax on wealth has long been levied, and their Prime Minister Gordon Brown proposes to increase it to 50% in a crisis. In Russia there is no such burdensome inheritance tax as in Europe. In the model for our right-wing USA, the inheritance tax is up to 77%, in France - up to 60%. We actually do not control the withdrawal of money abroad. They also turn a blind eye to the use of offshore (often criminal) tax evasion schemes. In Russia, unlike the United States, there are very soft laws punishing tax evasion, and a completely ridiculous punishment for construction financial pyramids. Madoff was sentenced to 150 years in prison in the United States for his "scheme", and our "mavrodushki" and "rulers" got off with a slight fright.
In the context of the crisis, the US and European authorities sharply tightened control over banks, requiring bankers to disclose the names of owners of suspicious accounts. Our government is either unable or unwilling to achieve such transparency. It is ridiculous to say that the Central Bank of Russia recently admitted that it does not know who the real owner of many banks is. …
After all, our liberal fundamentalism and the controlled justice that it has generated have already brought Russia to a complete “cherkizon”. If such a “cherkizon” were found in New York City, then you can be sure that Barack Obama, without looking back at liberal critics, would have named the true owners and patrons of this sewer to the American people for several days, brought them to court, and criminally confiscated in favor of the treasury. And we have?
You can bet that the case will drag on for years. There are already signs of a slowdown. Only small fry are swept up: disenfranchised Chinese and Vietnamese, prostitutes, small traders.
Will we be too surprised if, as a result, a hundred Vietnamese are deported from Russia, a dozen petty hucksters are identified, a dozen well-deserved prostitutes are deprived of their jobs? took the money offshore, and will not be named. After all, they have positions, surnames, capitals - mother do not cry! Where are you, Russian Obama?
Thus, such an educational and theoretical question as the subject of economic science, if answered incorrectly, turns into serious negatives in practice, a significant deterioration in the socio-economic situation of the country's population.
What research methods are used in economic theory? The most important of these is the method of scientific abstraction. It consists in distracting from the random, temporary and revealing the typical, natural. In this way, scientific categories are formulated that express the essential aspects of the objects under study.
Economic theory also applies the methods of induction and deduction. Induction is the movement of thought from particular to general conclusions. And deduction is the movement of thought from general provisions to particular ones.
Since the beginning of the 20th century, the Swiss economist Leon Walras introduced the method of economic and mathematical modeling into economic theory. He developed a model of economic equilibrium, which is based on the analysis of supply and demand and contains a number of systems of equations. They determine, first of all, the balance between the market for productive services and the market for consumer goods.
In addition, economic theory applies the methods of statistical observations of the object, graphic studies, economic experiments, development of hypotheses and their testing. For example, the Yaroslavl Regional Committee on Statistics has been monitoring all items of income and expenses of two hundred families selected from a representative sample for several decades in order to draw conclusions about trends in the dynamics of income and expenses of Yaroslavl residents on the basis of such observations.
The method of graphical studies can be illustrated by such an example. Suppose you have graphed the demand curve for your company's product, where the price is on the vertical axis, and the volume of demand is on the horizontal axis. If at a price of 100 rubles per unit of the product the demand was 300 units, and at a price of 300 rubles - 100 units, then the graph itself will show by connecting two points that at a price of 200 rubles the demand will be 200 units - there is no need to change the price in reality in order to to predict demand at the midpoint, it is enough to work a little with a pencil on a sheet of paper at the table.
An example of the use of the method of economic experiments is the following situation. Suppose you, the top manager of a large plant, are offered a new system of remuneration for employees by one of the experts, arguing that its implementation will bring the company a significant increase in profits due to higher labor productivity as a result of such incentives. But you doubt whether to agree, because in case of failure, the damage at the scale of your large enterprise will be rather big. And at the same time, I also don’t want to miss the opportunity that has arisen, completely rejecting the proposal on the move. Moreover, the experts thought something like that, argued that in case of success, the profits would be rather big. And now you are going to experiment: you are implementing what was proposed not on the scale of the whole plant, but only for several teams. After making sure that in these teams the increase in productivity compared to other units not participating in the experiment is indeed significant, at the second stage you expand the range of the experiment, covering several large technological workshops, not just teams. And when you see that even now the new wage system is working effectively, transfer it to the entire plant.
The method of developing hypotheses and testing them lies in the fact that even before the start of the study, the scientist formulates a working hypothesis, a scientific assumption about how, in his opinion, his research that has not yet begun will have to end. Note that this is not some kind of strangeness, but, on the contrary, a regularity of any research activity. Once K. Marx in "Capital" reasonably remarked that when we admire how skillfully bees build their honeycomb houses, we should not forget that even the "smartest" bee differs from the worst architect in that it is still builds these houses by instinct, but the architect, before building a house in reality, first “builds” it in his own head.
I will give an example of using this method from my personal practice. scientific work. Sometime in Soviet times, I was interested in the issues of socialist competition of people in the process of joint work, identifying the most effective incentives to increase its efficiency. My dissertation was also devoted to this, after defending which I was awarded the degree of candidate of economic sciences. But now the Soviet era has gone into retrospect, and another way of economic competitiveness has become relevant in the Russian Federation - competition between firms for the highest profit. And, starting to study it, I formulated a working hypothesis, from which it followed that my proposals to the government would be to support competition in every possible way and limit monopolies, to significantly increase the role of antimonopoly authorities to give them paramount importance in the system of government bodies.
However, a follow-up study: a study of financial economic activity six hundred subjects of the Yaroslavl business, analysis of relevant domestic and foreign sources - refuted the initial hypothesis. In the United States, where the best antimonopoly legislation in the world, the Americans themselves are dissatisfied with it, noting that often, instead of restricting monopolies, some competitors are infringed on the orders of others, and as a result, the power and influence of monopolists are strengthened, the number of which is somewhat reduced due to the economic destruction of retiring hands of state antimonopoly bodies. And Western Europe and Japan, despite following largely in the wake of American influence, did not blindly follow the canons of antimonopoly policy, reasonably considering that the dynamics of the modern economy can be provided primarily by scientific and technological progress, and its carriers, other things being equal, are non-competitive ones. entities, but very large corporations with dedicated R&D units. But they are precisely the ones who are very often monopolists. So the frantic, primitively straightforward struggle against monopoly can easily turn into the destruction of the economy, its most important elements.
The more specific Russian economy The 1990s-2000s was expressed by the dominance of monopoly to such an extent that, as the study showed, there was practically nothing else besides monopoly. So any antimonopoly activity appears to be a profanity, an imitation of activity. As a result of the study, thus, the initial hypothesis turned out to be refuted (do not rush to attach negative labels to me because of this: in science, a negative result is also a result, moreover, having positive value, because it shows subsequent researchers what to rely on, "without reinventing the wheel" and "without stepping on the same rake."
These are the main research methods that economic theory uses.
Within the framework of economics, there are two sections such as micro- and macroeconomics. How do they differ from each other? Microeconomics studies the economic phenomena and processes associated with the activities of an individual firm. And macroeconomics considers the economy on a national scale as a whole. Usually, microeconomic topics and categories are studied first, since the main provisions of macroeconomics are also based to a large extent on them.
The most important component of microeconomics is the theory of supply and demand. Demand is not just the desire to buy, but the solvent need of the buyer-consumer. The market demand for good A is the sum of the quantity demanded by each consumer of good A at different prices. The volume of demand may not coincide with the actual quantity of goods purchased (for example, in case of shortage).
The volume of demand for good A is influenced primarily by such a factor as the price of this good. Moreover, as a rule, an inverse relationship is reflected here, that is, the higher the price, the lower the volume of demand. This is the law of demand. On the graph (where the price is on the vertical axis, and the volume of the requested product is on the horizontal axis), it is reflected in the form of a demand curve, which is a falling line with a negative slope.
Here, the inverse relationship between the price of good A and the volume of demand for it is caused by the following factors. First, a decrease in the price of good A increases the number of buyers of it. Secondly, such a decrease in the price of good A expands purchasing power consumers. Thirdly, the saturation of the market leads to a decrease in the utility of an additional unit of goods. Therefore, buyers in this situation are ready to purchase an additional unit of product A only at lower prices (imagine yourself as a buyer when you are offered another jacket, and you already have, say, several similar jackets.
The demand curve reflects the entire set of ratios of the price of good A and the volume of demand for it. But a single point on this curve reflects not the demand as a whole, but a certain amount of demand at the corresponding price.
There are exceptions to the law of demand. For example, the Giffen paradox is named after an English economist who noticed that during the famine in Ireland in the middle of the 19th century, when the price of potatoes increased, the demand for it increased, as the consumption of other, better products decreased.
But sometimes they are mistakenly pointed out as an exception to the law of demand - the Veblen effect (after the name of the American economist who first described this phenomenon), associated with prestige demand, that is, the willingness of a certain part of society to acquire luxury goods even with a significant increase in prices for them in order to demonstrate belonging to the category of "chosen", "cool".
In addition to the price of good A, the following non-price factors also affect the volume of demand for it:
1) average income households,
2) consumer tastes, fashion,
3) the prices of interrelated goods - substitutes and complementary,
4) distribution of income between households,
5) the number of buyers,
6) inflation expectations.
How is the influence of these factors manifested? For example, if average household income increases, consumers will demand more than before for good A at each price. Thus, the entire demand curve will shift to the right and up.
A similar result will occur if product A becomes fashionable: a change in the tastes of buyers will cause an increase in demand for it at each price and, again, a shift of the entire demand curve to the right-up.
A similar picture will be with an increase in the price of product B, a substitute for product A (for example, butter - margarine). After all, then good A will become relatively cheaper than good B. Therefore, buyers will want to buy more of good A at each price. An increase in demand for good A will shift the entire demand curve upwards to the right.
Another thing is with complementary goods (for example, a car - gasoline). Here, on the contrary, a decrease in the price of good B will lead to an increase in the volume of demand for good A. And in this case, again, the entire demand curve will shift to the right and up.
Finally, inflationary expectations of an increase in the price of good A, as well as prices for all or most goods, spur rush demand. This will also shift the demand curve upwards to the right. Thus, if when the price of good A changes, the volume of demand changes and there is a shift from one point to another on the same demand curve, then when non-price factors change, demand itself changes and the entire demand curve shifts, since demand here changes at each price by product A.
If demand is a characteristic of the consumption of goods and services, then supply is a characteristic of their production. That is, the supply determines the quantity of goods or services that will be produced by firms and presented for sale. The volume of supply of goods A, as well as the volume of demand for it, may differ from the actual quantity of goods sold (for example, with a surplus of goods).
The volume of supply of good A, as well as the volume of demand for this product, is also influenced by several factors. Partly the same, and partly different. The combination of these and other factors includes the following:
1) the price of good A itself,
2) the prices of resources used in the production of good A,
3) the level of technology,
4) company goals,
5) the amount of taxes and subsidies,
6) prices for other goods,
7) expectations,
8) the number of producers of goods.
Thus, in algebraic terms, the supply of good A turns out to be a function of all these variables.
When studying the volume of production of goods A, it is necessary to consider in turn the influence of each of the factors on it, while conditionally accepting the rest as unchanged (conditionally, because in reality they are not at all unchanged).
An increase in the price of good A, ceteris paribus, leads to an increase in the volume of supply of this good. This is the law of supply. There is a direct relationship here, since for the producer of product A, its price determines the revenue (the product of the unit price of product A and the number of units sold) that the company will receive as a result of the sale of this product. Therefore, it is the increase in the price of good A that encourages producers to expand its production.
Each point on the graph of the supply curve (the price of commodity A again on the vertical axis, and the volume of its supply on the horizontal axis) reflects a specific ratio of the price of commodity A and the volume of its supply. And the entire curve reflects the full set of possible ratios of the price of commodity A and the volume of its supply, all other things being equal. Thus, the supply curve acts as a graphical representation of the supply function. Unlike the demand curve, it has an ascending character, a positive slope, since it reflects a directly proportional dependence of the volume of supply of goods A on its price. Here, the change in the volume of supply of good A under the influence of changes in its price is expressed in moving from one point to another on the same supply curve.
But if some non-price factor changes at a fixed price, then the entire supply curve shifts to the right-down or left-up. For example, if the prices for resources for the manufacture of product A rise, that is, the company has to pay more for labor, land, raw materials, energy carriers, then the profit of the manufacturer will be less, and hence the desire to offer product A for sale. Therefore, the supply curve will shift to the left. Conversely, a decrease in resource prices stimulates an increase in the supply of good A. And the supply curve will now shift to the right.
An increase in the level of technology for the production of product A will have a similar effect. After all, technological innovations, as a rule, reduce the cost of resources, which means that they cause an increase in the volume of supply of product A.
In a similar way, the volume of supply of goods A is affected by such a factor as the goals of firms. The main goal of firms is profit maximization. And if, for example, the company has set a goal - not to pollute the environment in the production of product A, then it will increase additional costs for environmentally friendly technology, which means that profits will decrease. Therefore, such a goal will reduce the supply of good A and shift the entire supply curve to the left.
Taxes and subsidies also significantly affect the volume of supply. For example, an increase in taxes reduces the supply of good A, because it reduces the profits of firms. Conversely, the provision of state subsidies to entrepreneurs and firms causes an increase in the volume of supply of good A and a shift in the supply curve to the right.
An important factor influencing the volume of supply of good A is the price of other, especially related, goods. For example, in the 1970s, world oil prices rose sharply, and this caused an increase in the supply of coal on the world market.
The next factor that affects the change in the volume of supply of good A is inflationary expectations. In a normal mixed economy with a normal market mechanism, this factor causes an increase in the supply of good A.
And finally, such a factor as the number of producers of goods A: the more there are, the greater the volume of supply of goods A.
Establishing the equilibrium price of a competitive market occurs under the influence of changes in both demand and supply. The price is always presented in monetary terms and is a kind of compromise between buyers and manufacturers of goods. The equilibrium price is set at such a ratio of supply and demand, when the quantity of goods that buyers want to purchase corresponds to the quantity that producers and sellers offer on the market. The situation of equilibrium of supply and demand is shown in the figure below:
The equilibrium price is the point of intersection of the supply and demand curves (E) (equilibrium point). It corresponds to a certain price level (Re), marked on the y-axis, at which a certain amount of goods (Qe), marked on the abscissa, is sold. As shown in the figure, any surplus of a commodity in the market (above point E) exerts "downward" pressure on its equilibrium price. Conversely, the presence of a shortage (below point E) will exert "upward" pressure on the price of the missing good until an equilibrium price is established.
Market equilibrium in any competitive market can only take place with respect to some fixed point in time. At each subsequent moment, the equilibrium can be established as some new value of the market price. However, this equilibrium always remains such a state of the competitive market, in which Qd = Qs. Any deviation from this state sets in motion market forces capable of returning the market to a state of equilibrium: to eliminate the shortage when Qd > Qs, or the excess supply when Qd
An important category in the theory of supply and demand and in general in microeconomics is the elasticity of supply and demand.
Elasticity is the response of supply or demand to a change in market price or consumer income. In the most general view The price elasticity of demand can be defined as the percentage change in the quantity sold of a good to the percentage change in its price:
Where EP is the price elasticity of demand; dQd – percentage change in demand, %; dР – percentage change in price, %.
This indicator is very important for an entrepreneur-seller. Why? Because the main goal of a businessman is to maximize profit, that is, the difference between revenue and costs for the production and sale of goods. Trade revenue is defined as the product of the market price of goods by the total number of their sales at that price. Naturally, the indicator of trade revenue directly depends on the degree of elasticity of demand.
For example, if a one percent decrease in the price of a product increases the number of its sales by more than one percent, then there is an elastic demand. And this allows you to increase turnover and trade revenue. If a 1% decrease in price causes an increase in sales also by 1%, then there is a unit elasticity of demand, which accelerates the turnover, but does not bring an increase in sales revenue. In practice, inelastic demand can also occur, when, with a one percent decrease in price, the number of sales does not even reach a one percent increase. In this case, the turnover does not accelerate, and a decrease in trade revenue is caused. And if, for example, a table salt merchant wants to increase sales, and hence revenue, by lowering the price, then he will be disappointed. Namely: buyers, despite the price reduction, will not increase the volume of purchases. What's the matter? After all, the seller acted taking into account the law of demand: the lower the price - the greater the volume of demand. But he did not take into account that salt is a product of price inelastic demand.
So, in the paragraph before, you made sure that the seller-entrepreneur is far from being indifferent to the price elasticity of demand. Therefore, in an economy with a market mechanism, a practice has developed when any self-respecting company calculates the price elasticity coefficient of its product and takes into account their results in its practical activities. But here I interviewed the heads and specialists of marketing services of many Yaroslavl enterprises even before the onset of today's economic catastrophe and faced a paradox in relation to the “alphabet” of textbook axioms about the importance of price elasticity of demand for an entrepreneur. Namely: marketers of enterprises selling their products not only in domestic, but also in foreign markets, confirmed that they really calculate the elasticity coefficients of their products, but only in relation to export operations. And none of them makes such calculations in relation to operations in the domestic, Russian market.
Why? After all, you can’t explain such disregard for the “textbook alphabet” by marketers in the case of internal operations simply as laziness or incompetence: for export operations, these same specialists have enough diligence and competence. But the fact is that they “feel with their skin” that true reality, which does not coincide with the propaganda declarations of many officials and journalists, which consists in a certain presence of a market and a market mechanism in the West and in their complete absence in Russia. And since there is no market mechanism, there is only the dictates of the monopolist, then there is no need to artificially calculate the unnecessary coefficient of price elasticity of demand.
Another indicator of elasticity that is of interest to the theory of supply and demand and, in general, microeconomic theory is the income elasticity of demand. It shows the consumer's reaction to changes in his income while prices remain unchanged.
The next important concept of this theory is cross elasticity. It characterizes the sensitivity of demand for one product to changes in prices for another:
Where EC is cross elasticity; - percentage change in demand for one product,%; - percentage change in the price of another product, %.
The elasticity of supply is measured as the relative change in the quantity of goods and their prices. Elastic supply is a situation of so-called instantaneous equilibrium, when a 1% increase in the price of goods causes an increase in the output of goods by more than 1% under the influence of a short-term increase in demand, and not for production reasons. Unit elasticity occurs when a 1% increase in price causes a 1% increase in output. With an inelastic supply of 1%, a price increase causes an increase in output of less than 1%, showing that demand has already adjusted to the increased price, which will persist in the long term, determining the scale of investment in the production of goods of this type.
The size, structure and dynamics of consumer demand is studied by the theory of consumer behavior based on marginalism. Its initial principles are the recognition, firstly, of the economic sovereignty of the consumer (i.e., the ability to influence the supply of goods through demand) and, secondly, the rationality of the consumer's behavior if he receives maximum utility with a limited income.
Utility - the degree of pleasure (satisfaction) from the consumption of goods. The usefulness of a product is a purely individual concept, which depends on many factors. The main factors influencing consumer behavior are shown in the diagram shown in the following figure:
If the tastes of the consumer are constant and the consumption function is continuous, then any infinitesimal increase in the quantity of a good corresponds to an increase in total utility. However, it increases at an increasingly slow pace due to the fact that the marginal utility of a given good (or added value) brought by the last unit tends to decrease. This is the law of diminishing marginal utility.
There are two ways to evaluate utility: cardinal and ordinal. The cardinal approach is associated with an attempt to calculate the value of utility based on the use of a conventional unit - util. Proponents of the ordinalist approach argue that utility cannot be measured quantitatively, but on the basis of preferences, ordinal utility can be identified, that is, consumer behavior can be described by ranking.
A graphic representation of various combinations of two economic goods that have the same utility to the consumer is called an indifference curve (U). The set of indifference curves of one consumer form an indifference map. Moreover, the more to the right and higher the indifference curve is located, the more satisfaction the combinations of two goods presented by it bring. In turn, the budget constraint line informs about the most profitable set of products for the consumer, the equation of which can be written as follows: I = P1 Q1 + P2 Q2, where I is the consumer's income; P1; P2 is the price of goods A and B; Q1; Q2 is the quantity of goods A and B.
The point where the indifference curve touches the budget constraint line shows the consumer's equilibrium position (consumer's optimum) (See the figure below). It is achieved when the ratios of the marginal utilities of individual goods to their prices are: MU1: P1 = MU2: P2.
The impact on consumer choice of prices and income is described in terms of income and substitution effects. The income effect is an increase in the consumption of a normal good as a result of a decrease in its price due to an increase in real income caused by a decrease in price, and vice versa, a reduction in the consumption of a normal good as a result of an increase in its price due to a decrease in real income caused by an increase in prices. The substitution effect is the consumer's response to an increase in the price of a normal good. consumer basket, leading to a reduction in the purchase of goods that have risen in price and to an increase in the purchase of goods that can replace those that have risen in price.
Along with the general principles of choosing a rational consumer choice, there are features that are determined by the influence of market demand on it, as well as tastes and preferences. These factors determine the functional or non-functional nature of demand.
Functional demand is the demand for a good due to the quality of the good. Non-functional demand is demand due to factors that are not related to the product itself. Of particular importance in non-functional demand are cases of mutual influence of market and individual demand, which American economist H. Leibenstein called the effect of joining the majority (the consumer buys the same as other consumers), the snob effect (the desire to stand out from the crowd) and the Veblen effect (prestigious or conspicuous consumption).
Functional and non-functional demand in economic theory is often correlated with normal and abnormal consumer behavior. Normal consumer behavior is described by the law of demand. In other words, as the price of a certain product rises, its consumption will tend to decrease. When the price falls, the consumer will buy more goods. Anomalous behavior of the consumer means that the behavior of the consumer is unpredictable, he reacts to market processes in a completely different way than most of his subjects.
Consumer behavior is influenced by the presence of uncertainty and risk. Uncertainty is a situation characterized by a lack of information about probable future events. Risk is a situation, the outcomes of which are known, but it is not known which of them will come exactly.
And now, taking into account the considerations just given, let us ask ourselves the question: how is the “behavior” of demand, its elasticity, modified in the context of the onset of a global economic catastrophe? First of all, it should be noted that the volume of demand, of course, is declining, because household incomes are declining, unemployment is growing. This, of course, is typical for both Western countries and Russia. However, according to many parameters related to the operation of the law of demand and the dynamics of its elasticity, the situation in the Russian Federation turns out to be specific and, as a rule, not in our favor. Remember the outcome of interviews with marketers of Yaroslavl enterprises? In the West, there was still a little market, but in Russia it does not exist at all. So what features could there be in the modification of the phenomena under consideration?
It should be noted that the tendency of many anti-crisis measures of governments in the West was aimed at strengthening state regulation economy, and thereby narrowing the market area. In our country, non-intervention of the state in the market sphere was declared to a greater extent. But you and I have already noted that, contrary to declarations, we simply did not have this sphere: what is usually declared a market in the legal sense, in terms of the real economic state, acts as a zone of absolute influence of a monopolist. As a result, if we take, for example, the price elasticity coefficient, then its practical significance in the West in the conditions of an economic catastrophe has significantly decreased. And in the Russian Federation, it had no practical significance before.
Compared to textbook recommendations designed for a normal, non-catastrophic situation, the situation with the state's attitude to stimulating demand in the new conditions also looks different. Thus, the mass protest action of hired workers, which engulfed the whole of France on March 19, 2009, was caused, according to the participants, just by insufficient "infusions" of the state for the purpose of such stimulation. At the same time, both the President and the Prime Minister of the country did not speak about the illegality of such claims of the protesters, but justified themselves only by the inability to satisfy them due to the aggravation of the financial situation due to the crisis.
In this regard, I consider the remarks of Academician, Vice-President Russian Academy Nauk A. Nekipelova (See: Arguments and Facts. April 1-7, 2009. No. 14) that with the onset of a global economic catastrophe, China found itself in a much more serious situation than Russia. After all, if our country depends practically only on the export of raw materials, then China depends on the export of a very wide range of goods. Therefore, the sharp decline in the demand of American and European buyers for Chinese goods has undoubtedly created a serious problem for the exporting country. But China tried to patch up the “hole” in external demand as much as possible by stimulating the growth of domestic demand. The fact that the anti-crisis program of the PRC government stipulates large-scale construction of housing and roads (although, unlike our country, special roads have already been built there, allowing, for example, transporting vegetables from one end of the country to the other in just a day), makes a fantastic impression. At the same time, Chinese manufacturers received a number of preferences from the government aimed at boosting demand. So, from January 1, 2009, the list of options was expanded, with the help of which an enterprise can return part of tax payments. This allowed the business to upgrade facilities and stimulated domestic demand for products. In addition, the preferential VAT rate for small businesses was reduced from 4-6% (for other enterprises - 17%) to 3%. Residents of Chinese cities began to distribute coupons for goods (primarily for household appliances), which can be purchased at certain supermarkets. And villagers began to receive benefits in the amount of 10-13% of the cost of goods of their own production.
In the Russian Federation, A. Nekipelov admits, the government has paid some attention to the real sector, focusing on supporting backbone enterprises. But these measures, by definition, could not become comprehensive. Nor could they become effective if support was provided to enterprises located in the middle of the production chain. Indeed, in this case, enterprises used the money they received to purchase the necessary means of production, produce products, but then it turned out that there was no demand for these products. This means that the state either had to buy these products itself, or admit that it gave money in vain for a deliberately inefficient business.
Indicative in this regard, according to A. Nekipelov, is the statement of the Minister of Finance of the Russian Federation A. Kudrin about the expectation of a second wave banking crisis. What is the reason for this expectation? It turns out that with the fact that the government of the Russian Federation gave money that Russian banks instead of lending to the real sector, they were exported abroad, but not in full (it turns out that this is unfortunately!), since part of this money was nevertheless distributed to enterprises in the form of loans. But then it turned out that these loans would not come back, because there was no demand for the products of these enterprises. And A. Nekipelov reasonably, in my opinion, proposes that the government launch a wave of demand along the entire production chain. For example, initiate the construction of roads.
As for the fall in external demand (and in the last quarter of 2008 alone it amounted to about $40 billion), the state, according to A. Nekipelov, could compensate for this fall. How? By reducing the withdrawal of funds from exporting industries, while maintaining their ability to fully implement the production and investment programs that have begun, and to finance the hole in the budget at the expense of the state's foreign exchange funds. Then, the academician believes, the economy would simply “not notice” the falling external demand. That is, there would be no decline in production, non-payments would not increase, taxes would go to the budget. So, there would be no need to spend huge amounts of money on unemployment benefits. At the same time, A. Nekipelov rightly notes, those 200 billion dollars that the government had already spent by March 2009 on correcting the ruble exchange rate would have been enough until the very end of the year.
These are the beginnings of microeconomic theory, connected, as you have seen, with questions of supply and demand, consumer behavior. These questions precede the consideration in microeconomics of the problem of the company's activities, its costs and income.
Microeconomics as part of modern economic theory
Introduction
The term "economy" comes from two Greek words: "oikos" - house or economy, and "nomos" - doctrine or law. That is, it turns out that the economy is an art, skills or the ability to properly manage a household.
The economy acts as the material basis for the existence of society. The fact is that the economy provides ready-made resources that are necessary for the further development of other areas.
Microeconomics acts as a special section in the fundamental course of economic theory.
The most stable is the structure of the course of economic theory, which is based on the subject of economic science - economics and its levels - a separate enterprise, firm, national economy, international processes in the economy. Structural economic theory includes three sections: microeconomics, macroeconomics and the world economy.
In the general foundations of economic theory, a description is given of the concept of society and the economy, material production as the basis of the life of human society; the necessity of studying the laws and patterns of development of social production is substantiated, the subject and object of economic theory are revealed, the historical process of the development of this science is shown. This section examines the nature of the economic system of society, the place and role of property relations in the economic system and in the totality of economic relations.
Microeconomics studies the behavior of individual economic agents. In the center of her analysis are the prices of individual goods, costs-costs, forms and mechanisms of capital formation and the functioning of the company, the pricing mechanism, and labor motivation. Microeconomics explains how and why economic decisions on the lowest level how firms plan for workforce, how consumers make purchasing decisions, and how product choices are affected by changes in consumer prices and incomes. Microeconomics helps to understand the interaction of economic entities and industries.
Macroeconomics studies economic processes and phenomena at the state level. The object of her research is the national product, economic growth, employment, inflation. Macroeconomics considers economic processes at the level national economy.
The world economy is considering economic relations in the world community, the principles of their functioning and regulation.
Object of study term paper is an integral part of the economic science of microeconomics.
The purpose of this work is to study the place and role of microeconomics in the system of economic knowledge.
To achieve this goal, the following tasks were set in the work:
explore the object and subject of microeconomics;
consider the methods of microeconomics;
consider microeconomics and economic practice.
1.Subject of Microeconomic theory
Microeconomics is integral part economic theory, studies the economic relationships between people and determines the general laws of their economic activity. In other words, microeconomics is the science of decision making, studying the behavior of individual agents. Its main problems are:
prices and volumes of production and consumption of specific goods;
the state of individual markets;
allocation of resources between alternative targets.
Microeconomics studies relative prices, i.e., the ratio of prices of individual goods, while macroeconomics studies the absolute level of prices.
The direct subject of microeconomics are economic relations associated with the efficient use of limited resources; decision-making by individual subjects of the economy in the conditions of economic choice.
Modern microeconomics consists of four parts. The first part is devoted to the analysis of patterns of formation of consumer demand. In this part of microeconomics, marginal utility theories are developed. In the second part of microeconomics, supply is analyzed primarily from the point of view of studying the behavior of an individual firm and the formation of its costs in specific market conditions. The third part is devoted to the analysis of the relationship between supply and demand, depending on the various forms of markets (markets of perfect or imperfect competition). The fourth part - the theory of distribution - analyzes the markets and the problems of pricing factors of production.
Microeconomics gives an idea of the movement of individual prices and deals with a complex system of relationships called the market mechanism. It considers the problems of costs, results, utility, value and price in the form in which they are formed in the direct process of production, in the acts of exchange in the market.
The foundations of microeconomics were created Austrian school, whose main representatives were K. Menger, F. Vizer, E. Böhm-Bawerk. A significant contribution to the development of microeconomics was made by the English economists A. Marshall, A. Pigou, J. Hicks, the American economist J. B. Clark, the Italian economist V. Pareto, the Swiss economist L. Walras, and others.
Microanalysis has undergone a certain modification, in particular, the object of microeconomics has expanded.
The object of microeconomics is the economic activity of people and the general economic problems permitted in accordance with existing institutions. The objects of microeconomics are: individuals, households, firms, owners of primary production resources, the largest corporations associated with other firms inside and outside the country, and even entire sectors of the economy.
The subjects of microeconomics are households, enterprises, and the state.
Let us refine the above general definition the subject of microeconomics (Fig. 3).
First. Under the conditions of the law of scarcity of resources, microeconomics formulates the basic principles of rational behavior of all types of economic entities, including enterprises, firms, households, etc., and studies the mechanism for making optimal management decisions.
Second. Microeconomics reveals the content of economic and social efficiency, develops criteria and relevant indicators that are used in assessing the final results of management.
Third. Modern microeconomics can be represented as a set of theories, including production theories, firm theories, pricing theories, development theories market relations and antimonopoly regulation, and finally, the theory of production costs, income and profit.
Fourth. Microeconomics studies economic relations arising in the process of production, exchange, distribution and consumption of material goods at the level of economic entities. Revealing the content of these relations, modern microeconomics explores the relationship of appropriation and ownership, the formation and development of the economic interests of economic entities.
Fig.3. Subject and objects of research in modern microeconomics
2. Methods economic analysis microeconomic theory
In order to penetrate into the essence of economic phenomena and put forward specific practical recommendations, microeconomics must be guided by the appropriate scientific methodology. The methodology of microeconomics includes the method and theoretical basis. The method acts as a set of general worldview principles, general scientific methods and particular methods of cognition. To give a logically consistent and verifiable explanation of economic events, scientists use a number of universal scientific techniques: they introduce concepts to denote observed phenomena, put forward hypotheses about the forms of interdependence between objects of observation, and create models that describe the mechanism of economic processes. Among the general scientific methods of cognition, modern microeconomics actively uses such methods as: scientific Abstraction, analysis and synthesis, induction and deduction unity of qualitative and quantitative analysis, system-structural analysis, etc. The most important method of economics as a science is the method of abstraction. This method is especially widely used by microeconomics in the study of the market mechanism, its constituent elements, the behavior of buyers and sellers, and so on. Although microeconomics deals with the markets of individual goods, it considers the market in general in its abstract form, which helps to better understand the economic content of the market, the mechanism of its functioning.
At the same time, the researcher is distracted from everything secondary in order to identify the most significant aspects of phenomena, repetitive features. This is how concepts arise: production in general, needs, distribution, exchange, etc. Logical concepts that reflect the most general and essential aspects of the economic life of society are called economic categories. In the economy, despite external chaos and accidents, there are certain, typical, characteristic connections. Analysis is the mental division of the phenomenon under study into its component parts and the study of each of these parts separately. By synthesis, a complete picture of a process or phenomenon is recreated. For example, when studying the mechanism of market pricing, individual aspects of the market mechanism are first studied: supply and demand, and then there is a transition to the synthesis of these parts and the study of the process of forming a market price. By means of induction, the transition from the study of single facts to general provisions and conclusions. Deduction is the transition from the general to the particular. Both methods are of equal importance in economic research and complement each other. They note that the traditional domestic economic theory is characterized by the desire for a more active use of deductive reasoning: having studied the general patterns in the development of economic processes that took place in the domestic or foreign economic history and economic practice, researchers formulate recommendations and conclusions. Western economists are more active in using induction as a method of cognition. They are characterized by an assessment of economic processes from the standpoint of an individual: a consumer or an entrepreneur. The method of microeconomic analysis is characterized by a certain specificity. In particular, the method of functional analysis is widely used, which requires consideration of certain elements of the economy, taking into account the impact on them of various factors. As a result, one object under consideration appears as a function, the other - as an argument. At the same time, the method of assumptions is often used, which involves an analysis of the impact of one factor on another “under other unchanged conditions”. An important role in microeconomics is played by the method of marginal analysis.
It involves taking into account changes in the form of an increase in certain results. economic activity: cost, income, product, utility, etc. This, in turn, determines the special significance of the statistical method, which makes it possible to obtain the data necessary to analyze the state of individual markets and enterprises, to divide them, however, as well as consumers, into certain types, types, categories. This method is often used in conjunction with the method of taking into account the equilibrium and non-equilibrium states of the objects under study: markets requiring a ratio of income and expenses of commodity producers, prices and utilities of consumed goods, etc. Unity of quantitative and qualitative analysis. The need to use quantitative analysis is usually not in anyone's doubt. It is always more difficult to organically supplement quantitative analysis with qualitative analysis, which involves the study of the nature of economic relations. The importance of qualitative analysis lies in the fact that it directly affects the relations of ownership and appropriation, the mechanism of formation of the economic interests of economic entities. The unity of quantitative and qualitative analysis is manifested when using such a well-known technique as comparison. In the process of comparison, it is possible to compare the quantitative and qualitative parameters of the studied economic phenomenon with the parameters (standard) of an already known phenomenon.
In practice, comparison is used when comparing: actual and forecast (planned) values; indicators of the analyzed enterprise and the results of the work of other enterprises in the industry; data on the development of the enterprise in reporting period and industry averages; various options for management decisions (business plans, etc.). System-structural analysis. A special advantage of system-structural analysis is that such a technique allows you to link individual parts, functions and subsystems, for example, enterprises into a single mechanism. It is supposed to highlight the internal and external factors of development of the studied economic entity, the discovery of its "systemic quality". balance method. A special form of implementation of structural analysis is the balance method of studying the economic process. The balance method is used to reflect the ratios, proportions of two groups of interconnected and balanced economic indicators, whose results must be identical. It is widely used in the analysis of the provision of an enterprise with labor and financial resources, in the analysis of monetary income and expenses of the household. The use of private methods of research logically follows from the general scientific methods of use. At the same time, private methods are able to take into account the specifics of an economic phenomenon and are focused on solving specific practical problems. Economic-mathematical methods and methods are widely used. Since the subject of microeconomics is the behavior of subjects of the economy, the method of observation acquires special significance in microeconomics. It's about about observing the behavior of people as producers and consumers, buyers and sellers, which makes it possible to identify the factors that determine this or that behavior, the presence of patterns of their action. modeling, graphic methods, experiment.
Modeling. In the modeling process, it is preferable to put forward not one, but several models, which up to a certain point should be considered as competing. In the future, those models are discarded that cannot explain the previous state of the economic object or that contradict reality.
In modern microeconomics, two types of models are used - optimization and equilibrium. Optimization models are applied when available optimal choice consumer and producer or market equilibrium point. Limiting values are widely used in optimization models. Models of market equilibrium are put forward in the study of the relationship between economic entities. In such models, only one variable acts as a variable. economic parameter. All others are treated as permanent. Realistic assumptions and explanatory power are especially important for models whose purpose is to reveal the patterns of behavior of economic agents.
Experiment. The experiment acts as an artificial reproduction of an object (economic process) in the most favorable conditions for the purpose of its study and accumulation of practical experience. The purpose of the experiment is to prove the correctness of a certain hypothesis put forward based on the study of existing practice. economic development.
. Microeconomics and economic practice
Economists divide economics into 3 levels:
1.descriptive (or empirical) economic science, which collects facts of economic practice related to a specific problem or a specific aspect of the economy, and the formation of hypotheses based on them.
A hypothesis is a formulated preliminary, untested principle. If the hypothesis is confirmed by economic practice, then it develops into economic theory. If the hypothesis is not confirmed by practice, then it is rejected.
2.Economic theory reveals the general principles (patterns) of the behavior of economic entities and institutions involved in the production, distribution, exchange and consumption of goods and services.
Due to the fact that over time the facts, i.e. the real behavior of economic entities and institutions change, it is necessary to constantly check the existing principles and theories with the changing economic environment. This fact (change economic environment) explains the reason for the change in dominance economic schools in the course of history economic thought.
3.Economic policy. The general idea of economic behavior (i.e. economic theory) that is formed on the basis of economic principles can then be used to develop economic policy, i.e. measures or solutions that provide correction or elimination of the problem in question. By setting economic decisions in motion, economic policy changes economic system, bringing it into a new state, and this in turn affects economic theory.
In the study of economic processes and phenomena, there are:
· positive economic theory - "a set of systematic knowledge related to what is" (J.N. Keynes). It explores the actual state of economic phenomena.
· normative economic theory - "a set of systematic knowledge related to what should be" (J.N. Keynes). It studies something ideal, i.e. what should be the economy and what economic action should be taken for this.
A positive statement may not always be true, but it can be verified with facts. Normative theories are most often inferred from positive ones, but their truth or falsity cannot be verified by facts. The implementation of economic policy involves the solution of the following tasks: 1) economic freedom (providing the opportunity to choose the behavior of economic entities);
) full employment (keeping unemployment at a natural level);
) economic growth (increase in the standard of living of the entire population); price stability (financial stability);
) economic security;
) fair distribution of income.
Workshop 1. Not related to the subject of microeconomics 1) efficient use of limited resources 2) free production resources 3) maximum satisfaction of people's needs 4) the behavior of individual economic entities Answer: 2 Under the conditions of the law of scarcity of resources, microeconomics formulates the basic principles of rational behavior of all types of economic entities, including enterprises, firms, households, etc., and studies the mechanism for making optimal management decisions. If the resources were not insufficient, there would be no need to take care of their best, optimal distribution among various needs, there would be no need to save them, increase the efficiency of their use, establish any principles for the distribution of consumer goods and services. 2. Economic models are used to 1) predicting the future 2) predicting what is most likely to happen under certain conditions 3) pinpointing the location of the economy at any point in time 4) all of the above is wrong Answer: 2 Microeconomics is concerned with explaining and predicting observed phenomena. In economics, as in other sciences, justification and forecasting are based on theoretical propositions that are used to explain observed phenomena in terms of a set of basic rules and assumptions.
Conclusion
Thus, microeconomics is part of economic theory as a whole, its important special section. As in all economic theory, microeconomics studies the economic relations of people, their economic behavior and activities. After all, it is people who seek and find resources, include them in the production process, produce products, goods, receive income, use them to support the family and society as a whole. The subjects of microeconomics are households, enterprises, and the state. The objects of microeconomics are the problems of rarity and optimal choice, issues of production efficiency, processes of utility formation, the mechanism of interaction between supply and demand. The specificity of the microeconomic approach lies in the fact that the analysis of the national economy begins with the observation of the behavior of individual economic entities, the interaction of which, in the course of achieving their goals, forms a social economy. In order to penetrate into the essence of economic phenomena, put forward a reasonable development forecast and specific practical recommendations, microeconomics is guided by scientific methodology. Methodology manifests itself as the ability to think in terms of scientific categories and concepts, it is revealed as a technology of theoretical thinking, it includes a method and a theoretical basis. The method acts as a set of worldview principles, general scientific methods and private methods of cognition.
theory microeconomics science
List of used literature
.M.I. Belyaev, "Microeconomics", Publisher: Moscow - 2011.
.Galperin V.M., Ignatiev S.M., Morgunov V.I. Microeconomics: in 3 volumes - M.: Omega-L Publishing House; St. Petersburg: Economics, 2010. Part 1
3.Gukasyan G.M., "Economic theory: key issues", M.: INFRA-M, 2012
.Nureev R. M. Course of microeconomics. Textbook. 2011
.Economic theory / Ed. A.G. Gryaznova, T.V. Chechelova. M., 2013
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Economic theory studies economic relations and the market organization of the economy. In economic theory, the functioning of the national economy and the organization of international economic relations are studied.
Economic theory consists of 4 sections:
- General foundations of economic theory
- Microeconomics
- Macroeconomics
- World economy
In the general section Basics of economic theory the market organization of the economy and the functioning of the market are studied: market entities, functions and principles of market relations, market infrastructure, forms of ownership, etc.
In chapter microeconomics the economic relations that develop between individual economic entities (firms, enterprises, organizations) and households are studied.
Microeconomics is the primary link in the economy. Its economic categories are: market demand, market supply, costs, profits, etc.
In chapter macroeconomics the activities of individual industries and the entire national economy of the country as a whole are studied. Here they study the decisions that are made by the government to manage the economy. Economic categories: aggregate demand, aggregate supply, inflation, unemployment, financial system, taxation, credit, banking system, etc.
In chapter world economy explores global economic relationships between countries, blocs and groupings of countries, between financial and economic organizations and the world's largest banks.
International economic relations are studied through the prism of the international division of labor and international economic organization.
In the world economy, the movement of investments, capital and labor between countries is studied.
Economic theory uses its own tools and concepts:
- Economic categories - basic, key concepts used in conducting economic analysis, drawing conclusions, and explaining others economic categories. Examples: price, profit, cost category.
- Economic laws are global, universal relationships and patterns that have a causal nature and operate for a long time and invariably, regardless of the will and consciousness of people. For example: , cost.
- Economic principles - features of the manifestation of economic laws. Example: the principles of market relations - private property, self-interest, competition and freedom of choice.
- Economic factors (causes of changes) - features of the manifestation of economic categories. Example: factors affecting exchange rate— the inflation rate in the country, the rate of economic growth in the country, the size gold and foreign exchange reserves, GDP per capita.
There are two types of problems in economics:
- The problem of rarity Natural resources limited and even rare. For example: oil reserves should be enough for 50 years, gas - 60, tungsten and molybdenum - no longer.
- The problem of choosing effective ways to use limited resources and the use of artificial and composite materials, resource- and energy-saving technologies.
Thus, the subject of study of economic theory is: the study of the effective use of limited resources to meet the unlimited needs of people.
Methods of economic theory
Economic theory uses the following research methods:
- analysis
- synthesis
- systematization of observations
- method of induction and deduction
- logical and historical approach
- method of scientific abstraction
- banking method
- statistical method
- economic-mathematical method
Thus, the methods of economic theory are a set of techniques and methods by which economic relations are studied.
Over the centuries, the subject of economic science has been refined, changed: until the 17th century. economics studied the features of the household, then A. Montchretien defined it as the science of the social economy (political economy). For many years, the wealth of nations was called its subject.
In the Marxist understanding, political economy is a science that studies the system of economic (production) relations that develop between people in the process of production, distribution, exchange and consumption of material goods, in conjunction with the productive forces of society.
In many modern textbooks, the economic behavior of people is considered as a subject of economic theory.
Synthesizing the ideas of various scientific schools, scientists for a number of centuries, subject of economic theory can be considered a system of economic (production) relations in unity with the wealth and limited resources, their effective use. This science studies human behavior - both as a producer and as a consumer.
Modern economic theory is the top of a multi-layered pyramid (system) of economic knowledge accumulated by mankind over the past 400 years. And the science of economics originated in ancient Greece, first singled out by Xenophon (430-355 BC) as "economy" in combination with the "polis" - the state, i.e. the science of the national (public) economy. The first stage in the birth of economic theory covers the era of slave-owning and feudal society, i.e. reflects the views of the pre-market era with the predominance of subsistence farming.
In the 16th century, after the great geographical discoveries, commodity-money relations began to develop rapidly. The systematization of economic knowledge began. Mercantilism arose as the first system of economic knowledge and the second stage in the formation of economic theory. During the period of the emergence of capitalism (in the 17th century), the French economist Antoine de Montchretien called the economy "political economy" ("Treatise of Political Economy", 1615). Thus arose an independent science - political economy.
The third stage of its formation as an independent science is associated with the birth of the physiocratic school in the middle of the 18th century. (F. Quesnay, A. Turgot), who (unlike the mercantilists) placed not trade, but the production of goods and services at the center of economic science.
The fourth stage is the development of the classical school of political economy, which arose in the last third of the 18th century. (A. Smith) and received the highest development in the XIX century. (D. Ricardo, K. Marx). Its main provisions remain of fundamental importance to the present day, i.e. developed and enriched in modern scientific schools, which originated from classicism and its criticism for 200 years.
The main directions and schools of modern economic theory (XX-XXI centuries) are:
Marginalism is the first and leading direction (scientific school) of neoclassical economic theory. The first marginalist revolution in economic theory took place in the 1970s. 19th century (W. Jevons, K. Menger, F. Wieser, E. Böhm-Bawerk). Its core is the theory of the "marginal utility" of a commodity, which is intended to replace the classical theory of the labor cost of a commodity.
Neoclassicism - developed in the 90s. 19th century as a result of the second stage of the marginalist revolution and reached its peak in the first third of the 20th century. in the writings of A. Marshal and J. Clark. The functional analysis of factors of production, the theory of factor income, pricing, as well as the use of economic and mathematical methods of analysis retain the greatest modern significance.
Neoliberalism emerged in the 1930s. 20th century and remains one of the most influential areas of economic theory (J. Schumpeger, W. Eucken, A. Erhard, L. Mises, A. Schwartz, and others). At the turn of the XX-XXI centuries. the Chicago school of neoliberalism or monetarism (M. Friedman) received great influence in theory and practice. Monetarism was the basis for a radical reform of the economy during the transition to a market economy.
Keynesianism emerged in the 1930s. 20th century in contrast to neoclassicism under the influence of the global economic crisis of 1929-1933. This theoretical school considers economic stability impossible without government intervention in the economy. Neo-Keynesianism revived in the 1970s. influenced by the new wave economic regulation economic growth.
institutionalism, which arose in late XIX v. as an alternative to neoclassicism, constantly evolving and enriching up to the present. This theoretical school put man at the center of economics and believes that economic theory should study not only economic relations, but all the conditions and factors influencing economic life - social, legal, psychological, political. Great importance is attached to the economic behavior of people, as well as social guarantees of economic stability.
Consequently, modern economic theory develops on the basis of a pluralism of economic schools and views that reflect different sides, sections of economic relations and all economic life.
The complexity and multi-level nature of economic life is due to the presence of a large number of related branches of economic knowledge, and, consequently, special economic sciences. These sciences, which study individual elements, structure, direct and feedback links of economic reality, have developed into a system of economic sciences.
The methodological, theoretical basis of this system is economic theory. Performing a methodological function, economic theory also has its own subject of study - the essence and nature of the economic activity of an individual subject and their entirety at the level of the national economy.
To economic entities in market economy include firms and enterprises, the state, various funds, associations, associations, households (family) and an individual. Their activity forms economic phenomena and processes. Causal relationships between economic phenomena in the process of their development are called economic laws. They are used by an economic entity to achieve certain results.
The functional activity of economic entities is aimed at solving three main tasks of reproduction.
1. What to produce, in what quantity, what quality and in what assortment.
2. How to produce, what costs to bear, with the involvement of what resources, using what technologies, with the participation of which economic entities.
3. For whom to produce, what exactly will determine the structure of social and industrial consumers and relations with them.
All three questions form the relationship between economic actors in the sphere of production, distribution, exchange and consumption.
The method of analysis is a way of knowing, a way of research. When studying economic theory, the general philosophical method of cognizing the world is used - dialectics, the foundations of which were laid by the ancient Greeks and which the German philosopher G. Hegel brilliantly developed into a scientific system. Dialectics considers phenomena in constant development, in their interconnection and interaction, penetrates into the essence of processes and phenomena, cognizes the causes and sources of development.
The following stages of economic research are distinguished.
1. Collection of facts to study the problem.
2. Generalization of the results, i.e. establishing economic principles. Drawing generalizations from facts is called economic analysis.
Here the method of induction is used - a conclusion from the particular to the general. For example, consider the relationship between price and demand for a particular product. The generalization here is the law of demand. The method of deduction is an inference from the general to the particular. Based on the derived law of demand, we can assume that for other goods there is a similar feedback between price and demand.
At the last stage, the general principles of economic behavior can be used to formulate economic policy.
Often used in generalizations forecasting method. Modeling is used to make forecasts. Economic model is a mathematical expression based on economic theory. You can use your firm's and your competitor's models to predict how your firm's output will change as a result of your firm's output.
Method of scientific abstraction- i.e. abstraction from everything private, random, short-term in determining typical, characteristic features.
Positive and normative analyzes play a leading role in economic research.
positive analysis involves the explanation and forecasting of phenomena in the economy. It is not associated with subjective value judgments and is based on what is and can be. Most of the positive statements are not controversial. For example, a positive statement is: “if a certain product is taxed, then its price rises” or “an increase in income tax leads to a decrease in the purchasing value of the population, therefore, demand decreases, prices do not rise.”
Regulatory Analysis based on value judgments individual people and based on what should be. It involves recipes for action and is applicable, as a rule, at the level of economic policy justification. For example, the statement “in order to reduce inflation, it is necessary to increase the income tax” is normative, because other economists may believe that income tax should not be increased, since this reduces the income of people who are already low in Russia. Thus, disagreements are almost always associated with the normative approach in economics.
Finally, there is often the notion opportunity cost. The cost of any product or service is determined by the amount of other goods or services (the sum of their values) that must be sacrificed in order to receive this product or service. For example, the opportunity cost of building a new stadium is the price of other goods and services whose production, figuratively speaking, is sacrificed for the construction of this stadium.
Economic theory as a science of the development of economic relations between people affects to varying degrees all aspects of the national and world economy. Therefore, it is closely connected with all other economic sciences, enriches and develops along with them in unified system economic knowledge.
Economic theory is the methodological and theoretical basis of all branch, functional and information-analytical sciences. The latter learn and study economic relations, interrelations and features of the manifestation of economic laws in certain sectors of the economy (industry, Agriculture, construction, agro-industrial complex, etc.), as well as their reflection in the financial, credit and other areas.
As the economy develops and scientific knowledge accumulates, differentiation and integration of economic sciences takes place. Branch and functional sciences associated with economics appear: economic sociology, history of economics, economic informatics, environmental economics, marketing, banking, exchange business, etc. Consequently, the system of economic sciences is constantly enriched and developed.
Economic theory occupies a leading position in the system of economic sciences and performs the following functions:
Cognitive or theoretical function - to know, study, explain the processes and phenomena of economic life, reveal their inner essence and relationships;
Methodological function - economic theory constitutes the theoretical basis of the entire system of economic sciences, each of which has its own theoretical provisions based on the principles of general economic theory;
Worldview function - economic theory, along with other economic sciences, contributes to the formation of a scientific worldview that is adequate to a civilized market economy;
Prognostic - a comprehensive alternative assessment, scientifically based prediction of economic and other consequences of economic decisions taken in order to strengthen the country's economic security.
Society always needs to make decisions about what goods and services should be produced and which should not, i.e. The economy is constantly faced with the problem of choice. On fig. 2.1 the production possibilities curve shows the maximum possible output with the full use of these resources and technologies.
The amount of resources used is unchanged, and production is carried out efficiently. Then the production possibilities frontier will look like the AB curve. (example "\u003e A units of PT, or B units of IT, or can be located at any point on the production possibilities curve AB. At this boundary, at each point, the society will produce the maximum possible amount of products with given resources. In reality, one option is chosen (a point on direct AB), which depends on many factors - economic, political, social, etc.
If society wants to produce more investment and consumer goods (point M is outside the production possibilities curve), then the available resources will not be enough, production will be impossible. An increase in the output of both types of goods with economic growth will become possible with an increase in the economic potential of the country (STP, new mineral deposits, the quality of the labor force and management, etc.).
Any point inside the production possibilities curve indicates underemployment of resources, their inefficient use.
At the same time, society usually has reserves available, which allows in an extreme situation to sharply increase the output of one product without reducing the production of another. The country's economy often underutilizes its economic potential: this is unemployment, inefficient management, bankruptcies of enterprises.
The quantity of a good that must be given up in order to obtain an additional quantity of another good is called opportunity economic cost this product, i.e. we are again confronted with the concept of opportunity cost. Here it is necessary to distinguish between the opportunity cost of producing an additional unit of goods and the total opportunity cost. The production of additional units of one commodity entails sacrificing an ever-increasing quantity of another commodity. This is the essence of the law of increasing opportunity costs (Fig. 2.2).
In this graph, the production of each additional unit of PT will require an increasing reduction in investment goods. This explains the upward concavity of the production possibilities curve.
1. What is the subject of study of economic theory?
2. Name the functions of economic theory.
3. Name three fundamental questions of economic theory. .
4. Define a general method for analyzing economic processes.
5. What is the essence of the methods of induction and deduction?
6. What are positive and normative tests?
7. Draw a production possibilities curve.
8. Indicate the place of economic theory in the system of economic knowledge.
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