Introduction to Micro-economics Technote

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# Introduction to Micro-economics Technote - PowerPoint PPT Presentation

Introduction to Micro-economics Technote. Creating a distribution; calculating a probability. Social science needs to add parts (individuals, firms, etc.) to create a whole. Market demand (private goods) adds horizontally Adding and summarising a group is a basic tool for all research

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### Introduction to Micro-economicsTechnote

Creating a distribution; calculating a probability

Social science needs to add parts (individuals, firms, etc.) to create a whole
• Market demand (private goods) adds horizontally
• Adding and summarising a group is a basic tool for all research
• We create a distribution of a group attribute (age) by counting members in categories
• We can use a small sample to infer features of a population, provided the sample has important properties.
Distribution of Class Ages
• Compute your age according to the hand out
• Plotting the age in groups generates a distribution.
• The wider the categories, the higher the count in each category, but the cruder the distribution
• The narrower the categories, the sparser the count for a give group size.
• Key attributes of any distribution are the mean (average) and variance (spread).
• The graph defines a histogram
From distribution to probability
• Define the area under the histogram/distribution as 1
• This allows one to answer questions such as
• What is the probability that some one is more than 19 in this class?
• What is the probability that someone has an age between 16.75 and 17.50 years
Normal Distribution

Small variance

Large variance