Author: Johnny Ch LOK

Publisher:

Published: 2019-11-30

Total Pages: 408

ISBN-13: 9781713479451

To go back to the example of the definitional relationship " income equals consumption plus saving", we can obviously calculate it means that income minus consumption, whereever saving appears in a system of relationships. Thus, reducing the number of variables and of equation. As ny explanation indicates that why micro economic data, e.g. indivdual income variable level, saving variable level is more accuate to be gathered to use for judgement when, why and how the kind of product general consumers behaviors or shopping desires change to compare macro economic data , e.g. the country's GDP in the country. Because we can not build up a theory of human behavior with the aid of definitional relationship alone, in addition we shall need relationship of age groups, such as a individual or a young age group, working age group, old age group different age consumers or occupation groups, e.g. professional occupation, such as teacher, doctor, lawyer , or low educational level occupation, such as factory worker etc. different age or occupation consumer groups of a consumption behaviouristic or consumer group character telling us something of the way in which the different individuals or consumer groups behavr or indicating the technical relationships which subsist between, say the input of factors of production and the output of product. Example of such relationships are: The familiar demand and supply to the brand product relationships; the relationship connecting saving to the individual income or general young age group income or old age group income or working people income in the society, and the rate of interest to the country's bank system; a relationship indicating the presence or absence of price control to gas issue concerns how to influence car buyers' purchase cars demands or driving desires. All of these any one of micro economic relationship is the influence of as aspect of the consumer behavioral changing or consumer desire changing system highly relevant to general macro economic behavioral change system to the country.Is these any advantage in operate with structural equations? The answer is " yes" for the following reasons. In the case of relationship expressing behavior these may be expected to ahve the highest possible degree of performance, since they reflect the behavior of only one type of entity in the system, such as sales and price information equations just mentioned, depend for their stability on the constant responses not of one but of two or more types of entity, in the example both buyers ( the kind of product consumers or buyers ) and sellers ( the kind of product sellers). Thus, if we can assume that the buyers' responses , through not the sellers' responses will remain constant over a period, we can express ( or forecast) the quantity transacted by using one equation if we adopt the demand equation. Whereas, we shall need to least two if we adopt that sales equation. Thus, in micro economic view, equation method , such as gathering the kind of sale and price their information, it may help the seller measure whether it ought set up how much sale price to the product to let many consumers feel the most reasonable in order to increase its sale number in the country's consumption market.