Monopoly

What is a monopoly?
Monopoly is a type of market where there is only one firm (monopolist) that supplies the good. The firm is very large, and has control of the market price (has a lot of market power).

Sources of Market Power
A monopoly has market power (the ability to set the prices higher than the marginal cost) because it has no competitors. Consumers have to either buy from the monopolist, or not have the good at all. As a result, there will be demand for the good even if the price is set high.

To maintain its market power, a monopolist has to avoid having competitions; once it has competitors, customers will no longer be willing to buy the highly-priced goods that it supplies. But how can it prevent competitors? High barriers to entry:

• Economic barriers: economies of scale, superior technologies, and large initial investments are all things that benefit the existing firm, allowing it to produce more efficiently.
• Legal barriers: patents and copy rights ensure that the monopolist is the only firm producing a good. Property rights may grant one firm the exclusive access to a certain resource.

Essential Nutrients

Nutrients are chemicals that an organism needs to carry out its life processes.

Out of all the nutrients, many of them need be obtained from our diet. This may be because our bodies do not synthesize enough of these nutrients, or because our bodies do not synthesize thems at all. We call these nutrients essential nutrients, and categorize them into the following: carbohydrates, fats, proteins, minerals, vitamins, and water.

Theory of Consumer Choice

When dealing with consumers' choices, it is important to think about utility, which is a measure of satisfaction. The more utility a consumer has, the more satisfied they are with the goods or services that they have received.

Total Utility and Marginal Utility
These two terms are relatively straightforward. Total utility refers to the total amount of satisfaction that a consumer has gained from a certain amount of goods or services. On the other hand, marginal utility refers to the additional satisfaction that a consumer gets for the consumption of one extra unit of good.

Having a positive marginal utility means that the total utility is increasing, since marginal utility is the additional satisfaction. Similarly, having a negative marginal utility will result in a decrease in total utility.

Diminishing Marginal Utility
In most situations, we experience a diminishing marginal utility. That is, as we consume more and more of one good, our additional satisfaction from each unit of the good begins to be less and less. For example, if a person consumes one unit of a food that they like, they would be extremely satisfied from that unit of food. However, suppose they go on and consume 100 more units of the food, then one can imagine the person growing more and more tired of that food as they continue to consume it. Their marginal utility decreases.

However, it is important to note that even if marginal utility decreases, the total utility would still be increasing if MU is positive. It's just that the consumer is getting more satisfied at a slower rate.

Utility Maximization

Perfect Competition

What is a Perfect Competition?
A perfectly competitive market is a market that has many small firms and many individual buyers. Each seller has a very small share of the market, and as a result is a price taker; they cannot control the market price. Also, the products are all identical, and the consumers have perfect information about the market. That is, as soon as one firm prices its goods higher than its competitors, consumers will know and will switch to buying from other firms.

Additionally, there no barriers for entering or exiting the market, thus new competitors can arise at any moment, and companies can easily leave the market if they are losing profit.

Individual firm in the short run...
As mentioned above, each individual firm has such a small share of the market that it doesn't affect the market price at all. This means that whatever quantity it produces, it can always sell all of them at the market price, and the marginal revenue is constant. As marginal revenue is constant, the average revenue is also constant. So P=MR=AR.

A firm will always produce at a point where MR=MC. And since P=MR=AR, it will produce at a level where MC=P=MR=AR.

However, at this point, the price may be at, above, or below the average cost curve of the firm. If price is equal to average cost, then the company is making normal profit:

There is neither economic profit nor loss

Consumer and Producer Surplus

Basic Definitions:
Consumer surplus: The difference between what consumers are willing to pay and what they actually pay.
Producer surplus: The difference between what the producers are willing to supply a good for and the actual price at which they sell the good.

In a graph:
In a graph, consumer surplus is represented by the area that is above the price, but below the demand curve.

On the other hand, producer surplus is represented by the area that is below the price, but above the supply curve.

Response to an Economics Question

Article: http://articles.latimes.com/2012/mar/24/business/la-fi-home-rental-20120324

For my economics assignment, we have to go in pairs and make presentations. For each presentation, the presenters have to summarize an article about an article on a current economic event, and pose two discussion questions .

Today, the presenters summarized the above article, and asked: "Do you think this pilot program will be successful? Will homeowners and investors be interested?"

My Response
In my opinion, this program will be successful, as it will definitely attract both homeowners and investors.

Looking Back At Grade 11 English

Ha, semester one has been over for more than two months, and I still haven't written my personal reflections for English and physics. Such a procrastinator...

Anyway, grade 11 English was probably the most stressful course that I have had in my school career (so far). For one, its workload was a lot heavier than those of the other courses. For example, I remember that during December, we had this many things due:

• Speech 
• Macbeth culminating activity (mine was a story book)
• ISP essay

This may not seem like too much, but considering that the Christmas holidays started on December 16th, and the fact that these three big assessments were all due before the holidays, I really think that the schedule was a bit cramped.  

Preparing for AP Microeconomics Exam

For my AP economics class, I have go to an afternoon session every Tuesday to learn the AP material and prepare for the AP exam. 

However, for the past few weeks, I have been feeling that these afternoon sessions really aren't enough of a preparation for the exam. This is partly because the lessons are all taught by other students (so sometimes they don't know the materials themselves), and partly because each session is only 1 hour to 1.5 hours long.

Anyway, regardless of why the afternoon sessions are not effective, I will have to do quite a lot of studying on my own. So just a while ago, I have placed hold on several AP microeconomics books, and I am planning to go through all of them once they have arrived. In addition, I am planning on making a blog post on each of the topics that may be covered in the exam. These include:

• Consumer and Producer Surplus
• Income and Cross-price elasticity
• Perfect competition
• Monopoly
• Monopolistic competition
• Oligopoly 
• Collusion
• Game theory
• Factor markets
• Market failures

That's 10 topics that I have to cover in four weeks (the AP exam isn't actually that far away)! I must thoroughly study six for the next two weeks, and then the other four during the remaining two weeks. Ugh, such a busy studying schedule, considering that this is something "extra."

Early Ideas/Beliefs About Heredity

Hippocrates:
Greek philosopher Hippocrates believed that every part of the parents produced "seeds," which would fuse together to create the offspring

Aristotle:
Aristotle believed that male and female semen mixed upon conception.

George Harvey
English physician George Harvey theorized that individuals arose through the process of epigenesis; he believed that embryos formed in stages and that their development could be affected by factors inside and outside of the mother.  

Anton van Leeuwenhoek
This dutch scientist, who invented the microscope, believed that each sperm contained preformed embryos and that the development of the offspring was controlled by the male parent. On the other hand, mothers had almost no effect on the offspring, except providing an environment for the embroys to develop.

Charles Darwin
Charles Darwin believed that the offspring contained variations of traits from both parents. However, he couldn't explain why.

Pangenesis
The belief that each organ contains "genes," which travel through blood, the parents' genitals, and into the children.

Blending Traits:
The belief that offsprings are the "mix" of the parents. (e,g, red flowers and blue flowers would produce purple flowers)

Factoring Polynomials

A Review Of Some Concepts (for myself):
Remainder Theorem:
When dividing a polynomial expression p(x) by a linear polynomial expression x-b, the remainder is p(b).

Factor Theorem:
A linear expression x-b is only a factor of p(x) if p(b) is 0. (So there must not be any remainder)

Integral Zero Theorem:
If x=b is an integral zero of the polynomial P(x), then the constant term of P(x) must be divisible by 2.

Rational Zero Theorem:
If x=b/a is a rational zero of the polynomial P(x), then the constant term of P(x) must be divisible by b, and the leading coefficient must be divisible by a.

Becoming A Christian??

For the past few weeks, I have become quite involved with church activities.

I have been going to my ethnic United Church youth group for four weeks, and just this week, I went to the bible study session at my friend's church.

During these occasions, I have learnt quite a lot of basic information about Christianity. For example, I learned the differences between the Old Testament and the New Testament, I learned the stories in Exodus and Genesis, and I learned several teachings/principles of the religion.

So do I believe in god yet? Of course not. I have grown up in a family that doesn't have a religion, and the majority of the people around me were either atheists or agnostics. Therefore, I have never really thought about God's existence or non-existence, and have never imagined that there would be a superior being watching over me.

But will I ever become a believer? I don't know. I want to be a Christian— I really agree with many of their beliefs, and admire their virtues— but at this stage, it's still hard for me to just accept the existence of God as a fact. And I simply can't imagine how I may change my beliefs over time. So basically, there's no way to tell.

Meanwhile, I should try my best to attend youth groups and bible studies, to expand my knowledge on the bible and Christianity. And hopefully within a few months, I will begin to have a better understanding of my own beliefs.
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If you find this post to messy and confusing, it simply reflects my state of mind. I am really confused about what my beliefs, and what they will be.

The Evolution of Cooperation by Robert Axelrod

image taken from here

In The Evolution of Cooperation, Robert Axelrod studies the evolution and nature of cooperation through his two computer tournaments of prisoner's dilemma. In both of his tournaments, the winning program employs the tit for tat strategy, and he attributes the success to:

• Being nice: it always cooperates unless the opponent defects
• Provocable: one provoked (being defected), it is quick to defect on the next turn. Thus it is not exploitable.
• Forgiving: it forgives the opponent for defecting as soon as the opponent switches to cooperating. This makes it easy for the two sides to restore to mutual cooperation
• Clarity: its strategy is very clear, allowing the opponent to know that it is best to cooperate with it

In the book, the author also discusses how this might come in play in many situations, the "stability" of such a strategy, as well as how to encourage or discourage cooperation.

My Sister's Keeper by Jodi Picoult

In My Sister's Keeper by Jodi Pocuolt, 13-year-old Anna Fitzgerald was born with the intent that her cord blood would cure her sister, Kate, of Leukemia. However, Kate started relapsing five years after Anna's birth, requiring Anna to donate her blood, bone marrow, and— finally— kidney. This prompts her to sue her parents so that she can get medical emancipation from them.

From this, it is quite clear that the book centers on the issue of organ transplantation. It raises many questions regarding the ethics of organ transplantation, and lets the readers to deliberate over them. For example, should parents be able to genetically screen the embryos of their children, to ensure that the children can become matching donors for their older siblings?

What amazed me, though, was how the author managed to show the dynamics and complexity of Anna's household. By including narrations from each of the family members (except Kate), Picoult successfully illustrated the complicated relationships between each pair of family members and the conflicting emotions of them. To me, this was great because it demonstrated the extent to which a family could be affected by the issue; it showed the human and emotional— as opposed to the legal —side of the story.

In my opinion, though, the book had some flaws. For one, I found it entirely unnecessary to include Julia's and Campbell's (the lawyer's) relationship— I just don't see how it's relevant! Also, I quite disliked the ways in which Anna interacted with Campbell. She was always extremely rude and disrespectful, which didn't seem to match her personality depicted throughout the other parts of the novel.

Overall, I definitely think that this is a novel that is worth reading. It has a unique theme, as well as a good storyline. There were some parts that I didn't like, but for the most part it was good and thought-provocative.