Microeconomic Principles in Verse*
by Greg Trandel**

 
Curves indifferent and constraint of the budget,
What he'll buy, you'll know; you won't have to fudge it.
Market equilibrium is the reason why
Price is at the crossing of demand and supply.

If you keep these straight, then give yourself a hand.
When the D curve shifts, that's a change in demand.
But when people buy more 'cause of a shift in S,
Change in quantity demanded is what you express.

Marginal benefit, marginal cost.

Little move in quantity when the price does change,
Elasticity's in the inelastic range.
When demand's elastic and the selling price rise,
Fall in revenue; the firm's owner always sighs.

In the market price, there is lots o' information,
Invisible hand leads to coordination.
Competitive outcome promote efficiency,
Wisely-used resources is what you're gonna see.

Marginal revenue, marginal cost.

To know your choice is helpin' your community,
Keep in mind the cost of opportunity.
If the price is set equal to marginal cost,
No gain in surplus will ever be lost.

When a firm chooses price it won't get in a bind,
MR equal MC is the rule to keep in mind.
Why is monopoly not our favorite outcome?
Price is high, buying low, problems it'll cause some.

Marginal revenue, marginal cost.

How to differentiate with regard to price?
Elasticity big, pricing low would be nice.
If your action harms me in a way external,
Too much of it you'll do; write that in your journal.

'Cause people may ride freely on a public good,
Mandatory taxes may help us where they could.
Sometimes gotta choose: efficiency or fairness.
Econ's not enough; need political awareness.

Marginal revenue product, marginal cost.

With the advantage that is called comparative,
Specialize and trade should be an imperative.
When information is rather asymmetric,
Adverse selection can be a kind of bad trick.

It won't always help when the gov'ment gets involved,
Motivation problems aren't easily solved.
Help the group or me, the dilemma of a prisoner.
Learn these things; you should pass the final quiz in here.

 


  Footnotes:
*   Or maybe "in rap", but I probably shouldn't use the word "rap" ar all.
**   Inspired by --- and in a couple cases, stolen (with permission) from --- " The Econ 1 Rap" by Daniel S. Hamermesh.
 

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