Lecture 1a - Microeconomics
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
● Focus of this course is on normative economics cost is the benefit you sacrifice when you choose one
● Important to understand which stakeholders are option over another. The benefits chosen should be
involved greater than what is ‘forgone’
● Cannot take everything into account; have to make - Helps to answer the questions in red
trade-offs
● Groupwork topic: an intervention in the food system to ● Economics is not accounting
improve safety; try to add something new, not
something that already exists
● All papers consider methods we will learn in the course
- Accounting to get insight in the performance of a
● Learning outcomes company
- Learn about economics and role of economics in decision - Economics deals with what to do with the measurements
making
- Learn the basic principles underlying economic thinking ● Choices
- Learning about market equilibrium - Involves trade-offs and opportunities
- Learn about various forms of elasticity - The fact that there is a trade-off means that is an
opportunity cost (= what you give up)
● Mandatory reading material for this lecture
- Reader: 1a - Microeconomics ● Value = opportunity cost
- The benefit you sacrifice when you choose on option over
● The definition of economics another
● High income of poultry farmers in 2003, with an outbreak ● Economic terminology: demand and supply
of Avian Influenza. How is that possible? - Scarcity
- Demand, supply and elasticity
- Equilibrium price and quantity
● Scarce resources
- Income of poultry farmers was higher during the outbreak
- Because of the outbreak the prices went up and thus
- Scarcity in economic perspective is different than normal;
poultry farmers had a higher income
limited availability of water in the Netherlands
- Affected farms were let out of the equation
- It is an entity that helps an individual to make a living
- Resources can be renewable (crops) or non-renewable
● What is economics?
(labour)
- Natural resources are
● Scarce resources
- But economics is also the study of how we can best
increase a country’s wealth with the resources that we
have available to us. Wealth in this definition includes
tangible (cars, houses, etc) as well as intangible (more
leisure time, cleaner air, etc) products.
- In economics, there are choices to be made. Economics
involve trade-offs and opportunity costs. The opportunity
COURSE CODE: COURSE TITLE LESSON # 1
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
- The figure above represents a production possibilities
curve; any point on the curve (E, C, B, A) shows an output
combination that uses all available scarce resources as
efficiently as possible.
- Points on the inside of the curve (G, D) do not make use of
resources available.
- Points on the outside of the curve (F) are unattainable for
now; when there are future technologic advances or the
capital stock (machinery, equipment, office buildings)
increases -> production curve could shift to the right and F - Da = the demand schedule, not the demand
could become attainable, which is called economic function -> schedule of quantities that
growth. consumers are willing to purchase at various
prices for a specific period of time, where other
● Summary demand factors are held constant.
- This is too simplistic however, since demand is
also a function of price of substitutes, income,
demographics, etc.
- Example for the demand of scheduled butter is
● The law of supply and demand -> Qb (quantity of butter demanded) = 100-
0.4*Pb + 0.5*Pm + 0.2*INC, where Pm is the
● The law of demand per-unit price of margarine and INC is the
income.
- Q = quantity
- P = price
- If the price is higher, than the demand is lower
- The demand is the curve
- Economic law - If demand is increasing, than demand moves to
- So the price of a product and the quantity demanded are the right = increasing demand (moving over the
inversely related, however, this is only the case if line)
everything else remains constant (ceteris paribus).
● Demand schedule vs. demand function
● Ceteris paribus conditions - demand
- Conditions of demand; typically the demand is dependent
● Impact of an increase in real income on the demand for
on the consumers income
apples
- Different for luxury products; higher income means higher
demand
- Policy; can also lead to increasing demand
- Aggregate figure; if population increases than the demand
increases
● Demand curve
- If the income increases = demand for apples may increase
as well. So demand for certain products increases as a
whole.
COURSE CODE: COURSE TITLE LESSON # 2
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
● Effect of higher price of flour on demand of sugar
● Impact of Salmonella outbreak on demand of poultry
● Effect of higher price of flour on demand of sugar -
(Complements, how would you prepare cookies?)
- Changes in complementary products affect the demand as
well -> examples of complementary products are
mozzarella cheese and pizza dough, peanut butter and
jelly or white flour and sugar
- Price of flour could affect the demand of sugar -> sugar
and flour are used a lot together for baking cakes, so
when the price of flour goes up, the demand for sugar will
- For the same price, we consume less after a decrease as well
Salmonella outbreak -> so shift of the demand
curve to the left. ● Question
● Impact of winter freeze (affecting apples) on the demand
of oranges
- Bad weather leads to a lower harvest than expected =
● Impact of winter freeze (affecting apples) on the demand there is a change in quantity supplied but not in actual
of oranges - (Substitutes you can replace apples with supply, so the supply curve is still the same
oranges) - When more firms produce the same product -> supply
increases
- If a farmer increases his wheat production, he will sell
more wheat and increase his revenue because this farmer
is only one out of the many farmers in the country, since
the increased production of this one farmer will not lower
the price of wheat
- However if all wheat producers increase their production -
- Buy oranges instead of apples since they are > supply will increase and the price of wheat will fall and
cheaper and an alternative then the revenue for the farmers might not increase.
COURSE CODE: COURSE TITLE LESSON # 3
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
● Focus of this course is on normative economics cost is the benefit you sacrifice when you choose one
● Important to understand which stakeholders are option over another. The benefits chosen should be
involved greater than what is ‘forgone’
● Cannot take everything into account; have to make - Helps to answer the questions in red
trade-offs
● Groupwork topic: an intervention in the food system to ● Economics is not accounting
improve safety; try to add something new, not
something that already exists
● All papers consider methods we will learn in the course
- Accounting to get insight in the performance of a
● Learning outcomes company
- Learn about economics and role of economics in decision - Economics deals with what to do with the measurements
making
- Learn the basic principles underlying economic thinking ● Choices
- Learning about market equilibrium - Involves trade-offs and opportunities
- Learn about various forms of elasticity - The fact that there is a trade-off means that is an
opportunity cost (= what you give up)
● Mandatory reading material for this lecture
- Reader: 1a - Microeconomics ● Value = opportunity cost
- The benefit you sacrifice when you choose on option over
● The definition of economics another
● High income of poultry farmers in 2003, with an outbreak ● Economic terminology: demand and supply
of Avian Influenza. How is that possible? - Scarcity
- Demand, supply and elasticity
- Equilibrium price and quantity
● Scarce resources
- Income of poultry farmers was higher during the outbreak
- Because of the outbreak the prices went up and thus
- Scarcity in economic perspective is different than normal;
poultry farmers had a higher income
limited availability of water in the Netherlands
- Affected farms were let out of the equation
- It is an entity that helps an individual to make a living
- Resources can be renewable (crops) or non-renewable
● What is economics?
(labour)
- Natural resources are
● Scarce resources
- But economics is also the study of how we can best
increase a country’s wealth with the resources that we
have available to us. Wealth in this definition includes
tangible (cars, houses, etc) as well as intangible (more
leisure time, cleaner air, etc) products.
- In economics, there are choices to be made. Economics
involve trade-offs and opportunity costs. The opportunity
COURSE CODE: COURSE TITLE LESSON # 1
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
- The figure above represents a production possibilities
curve; any point on the curve (E, C, B, A) shows an output
combination that uses all available scarce resources as
efficiently as possible.
- Points on the inside of the curve (G, D) do not make use of
resources available.
- Points on the outside of the curve (F) are unattainable for
now; when there are future technologic advances or the
capital stock (machinery, equipment, office buildings)
increases -> production curve could shift to the right and F - Da = the demand schedule, not the demand
could become attainable, which is called economic function -> schedule of quantities that
growth. consumers are willing to purchase at various
prices for a specific period of time, where other
● Summary demand factors are held constant.
- This is too simplistic however, since demand is
also a function of price of substitutes, income,
demographics, etc.
- Example for the demand of scheduled butter is
● The law of supply and demand -> Qb (quantity of butter demanded) = 100-
0.4*Pb + 0.5*Pm + 0.2*INC, where Pm is the
● The law of demand per-unit price of margarine and INC is the
income.
- Q = quantity
- P = price
- If the price is higher, than the demand is lower
- The demand is the curve
- Economic law - If demand is increasing, than demand moves to
- So the price of a product and the quantity demanded are the right = increasing demand (moving over the
inversely related, however, this is only the case if line)
everything else remains constant (ceteris paribus).
● Demand schedule vs. demand function
● Ceteris paribus conditions - demand
- Conditions of demand; typically the demand is dependent
● Impact of an increase in real income on the demand for
on the consumers income
apples
- Different for luxury products; higher income means higher
demand
- Policy; can also lead to increasing demand
- Aggregate figure; if population increases than the demand
increases
● Demand curve
- If the income increases = demand for apples may increase
as well. So demand for certain products increases as a
whole.
COURSE CODE: COURSE TITLE LESSON # 2
, BEC21306
Lecture 1a - Microeconomics
Food Safety Economics | Period 5 | 2025-2026
● Effect of higher price of flour on demand of sugar
● Impact of Salmonella outbreak on demand of poultry
● Effect of higher price of flour on demand of sugar -
(Complements, how would you prepare cookies?)
- Changes in complementary products affect the demand as
well -> examples of complementary products are
mozzarella cheese and pizza dough, peanut butter and
jelly or white flour and sugar
- Price of flour could affect the demand of sugar -> sugar
and flour are used a lot together for baking cakes, so
when the price of flour goes up, the demand for sugar will
- For the same price, we consume less after a decrease as well
Salmonella outbreak -> so shift of the demand
curve to the left. ● Question
● Impact of winter freeze (affecting apples) on the demand
of oranges
- Bad weather leads to a lower harvest than expected =
● Impact of winter freeze (affecting apples) on the demand there is a change in quantity supplied but not in actual
of oranges - (Substitutes you can replace apples with supply, so the supply curve is still the same
oranges) - When more firms produce the same product -> supply
increases
- If a farmer increases his wheat production, he will sell
more wheat and increase his revenue because this farmer
is only one out of the many farmers in the country, since
the increased production of this one farmer will not lower
the price of wheat
- However if all wheat producers increase their production -
- Buy oranges instead of apples since they are > supply will increase and the price of wheat will fall and
cheaper and an alternative then the revenue for the farmers might not increase.
COURSE CODE: COURSE TITLE LESSON # 3
