It's Amy. Here is the poem Olivia and I crafted for the GOA Microeconomics Unit 3 Creative Exam.
Poem:
With its curves and fancy terms
It might frighten you from afar
But microeconomics’ impact I affirm
touches all from America to even Qatar.
With the economy’s countless concepts and rules
We study how and why things are exchanged
And work hard to develop the tools
To contribute to the market’s growth and change.
It all starts off with opportunity cost
Before we make hard decisions each day
We must evaluate what we’ve gained and lost
And the prices we will pay.
Something might seem fun
Or appealing at the time
But long term you might sacrifice a ton
And unwisely waste all of your dimes.
When I’m unsure whether to study my notes
Or catch up on my favorite show
Tradeoffs remind me that a brief half-hour with the remote
Can’t compete with the amazing A+ glow.
The opportunity cost will sustain
When you chose between cake and pie
Just a fork and napkin you need to obtain
So either choice will fly.
But when one option requires much more
And you want to spend time on one as well the other,
The opportunity cost will soar
as the resources are not adaptable with one another.
The production possibilities curve keeps us on track
As it shows us the possible output combinations
Above or under you have to look back
because our scarce resources run the operation.
Above the curve is tough to reach
As resources would need to increase
To stay below the curve I would not teach
As your efficiency rate will certainly decrease.
How our goods are allocated
Between businesses and the buyer
Can be much more clearly translated
by the market’s circular flow model that rotates like a tire.
In the resource market with land, labor, and skills
The people help businesses produce
And in return their wallets fill
So they can afford to reproduce.
Once you look at the product market
And how companies distribute their goods
You’ll see the how the people commit
To spending money and maybe more than they should.
It’s never fun when the government jumps in
And we spend days paying all our fees
But in fact they make sure market activity does not wear thin
And send us transfer payments to some degree.
As Friedman makes quite clear
The human species is oh so greedy
Without hesitation most will profiteer
And do it very quick and speedy.
Making tough decisions each day
All we really want to do
Is maximize our pay
As we dream of the millions we pursue.
Supply and demand
are used to determine market price
so I’ll help you understand
these terms in a way that will entice
First let’s look at this fundamental model
With the Quantity on the X, and Price on the Y-axis
The supply curve rises while the demand dawdles
Which you will understand with practice
The demand curve trends down,
because a price drop increases the quantity demanded
No consumers will frown
because we all love low prices, who doesn’t?
Meanwhile the supply curve trends up,
remember that firms want to maximize their profits
Who would charge lemonade for $10 a cup?
That’s right, only the sellers would benefit.
So what’s that dot in the middle?
Why it’s the equilibrium point
where neither the consumers nor firms are swindled
Now here’s how to find where they intersect
Set quantity demanded and quantity supplied
equal to each other
Because then you’ll solve for Price which then provides
the Quantity when you plug it back in thither
Now you may be wondering
what affects the demand and supply
these are the determinants which are not at all baffling
Here are the things that apply
Demand determinants include
Price, Income, tastes/preferences, expectations
number of buyers, and price of related goods
And with supply determinants there’s some alteration
The same are price, and expectations
different are technology input costs, and number of sellers
But only one is the change in quantity demanded/supplied’s causation
It’s the price that causes movements along that curve, no simpler
So how does equilibrium shift, you ask?
That happens when there’s a change in demand/supply
When the other determinants affect your market
Demand and supply can shift right or left, no lie!
When Demand shifts left
Price goes down and quantity does too
When to the right it shifts
both Price and Quantity goes up through and through
But when Supply shifts left
Price climbs up and quantity falls down
When to the the right it shifts
Price falls but the quantity rise up not down
Now that we are through
with the supply and demand model
We can move onto productivity and cost functions woo hoo
This graph isn’t too much of a riddle
Let’s look at this picture first
Productivity’s on the Y and input on the x-axis
Are you ready to get immersed?
You’ll understand their shapes with a little practice
3 little functions you need to know
First up is total product, aka TP
And there are two little functions below
marginal product and average product: MP and AP
So TP is the tallest
it’s shape, exponential up to a certain quantity,
then it slows down in earnest,
to reach it’s maximum height then fall down without ambiguity
Next MP starts from the same spot
But peaks only when the TP’s exponential curve is at its highest
Then down, down it was brought
Till it hit 0 productivity at TP’s tallest
Last we have the AP curve
all we know is that it’s highest point intersects MP
Left of the max, the MC slope rises, we observe
Right of it, it falls down as if on a slide, wee~
But what of the cost output model
With output on the X, price on the y-axis
The functions, MC and ATC, you don’t need to fiddle
Because they’re symmetric to MP and AP, they’re matches!
MC stands for marginal costs you see,
its shape is like a Nike swoosh
With a productivity increase
it makes sense; costs would go down with a whoosh
ATC stands for average total costs you see,
here its lowest point intersects
the MC curve wherever it please
it follows the logic of its AP counterpart, correct?
One more term to define, here we go
let’s finish off with the law of diminishing returns,
it’s apparent when our MP past the maximum oh,
but our TP doesn’t falls, don’t get too concerned
When MP goes from a positive to negative slope
on this productivity vs input
it means each additional input produces less, but don’t mope
for the maximum TP hasn’t been reached; you’re not in a rut
Thus our poem has come to a close
We’ve defined so many words; it was really fun
But it’s now time for a new unit, and everyone knows,
Our journey in microeconomics is far from done.
