1. Intro to Microeconomics

First steps in microeconomics — no calculus, learn by touching sliders. From gasoline prices and lunch menus to cafes, subscriptions, and cigarette taxes: see the logic behind everyday choices.

• Where Demand Meets Supply — Move the sliders and touch why a liter of gasoline costs what it costs. When the price rises, people want to buy less and sellers want to sell more. The point where the two amounts match is the equilibrium. There, nobody has a reason to change the price. The two amount formulas sit side by side below. For example, when a 🍬 candy costs 300 won, all 30 🧑 classmates fight to buy one. At 1,000 won, nobody buys any. The 🏪 shop owner puts out more candy the higher the price goes. The market stops at the price where the two amounts match.
• Splitting the Lunch Budget — Split a 40-won lunch budget between gimbap and tteokbokki, then find the best combo. The 💰 money you can spend is fixed. What you spend on the two foods cannot pass the budget. The best combo is where the last won buys the same happiness on either food. The second formula below states that condition. For example, you have 4,000 won: a 🍞 bread costs 1,000 and a 🥛 milk costs 2,000. One of each fits the budget exactly. If the last 100 won on bread felt better, buy less milk and one more bread.
• The Cafe Owner's Math — Open a cafe and work out how many cups to sell to come out ahead. The cost of one more cup of ☕ coffee is the marginal cost. It climbs as the cups pile up. While the price beats that cost, each sale adds profit. Stop where the two become equal — that rule is the formula below. For example, a cup costs 2,000 won to make and sells for 4,500, so each cup adds 2,500. By evening, ingredients run low and one more cup costs 5,000. From then on, every extra cup loses 500 won.
• Competition vs Monopoly — Put the same market side by side: competition on the left, monopoly on the right. With competition, many 🏪 shops pull the price down toward cost. A monopolist stops where marginal revenue meets marginal cost. Fewer trades happen, and the lost gains stay as a red triangle. The less price-sensitive customers are, the bigger that triangle grows. For example, if one video app is the only one your 🧑 classmates watch, a fee hike leaves them nowhere to go. With three similar apps, one hike sends everyone elsewhere. The more trapped the customers, the bigger the monopolist's triangle.
• Taxes and Price Ceilings — Put a tax on cigarettes and a cap on rent, then see who actually pays. A tax drives a wedge between the price buyers pay and the price sellers get. The wedge lands heavier on the side that cannot walk away. A price ceiling freezes the price but makes buyers line up instead. The formula below splits the tax burden. For example, add a 100-won tax to one 🍬 candy. A 🧑 classmate who cannot live without candy pays almost all of the higher price. A classmate who can take it or leave it just stops buying. Then the 🏪 shop cuts its own price and shoulders the tax.
• Two Firms Watching Each Other — In a town with only two cola firms, each firm sizes up the other and picks its output. The price is set by the two firms' combined output. Once the rival picks a quantity, a reply rule gives your best answer. The market settles where the two replies cross. That reply rule is the formula below. For example, only two booths sell 🍬 candy at the school fair. If the other booth puts out 10 📦 boxes, your share shrinks. If it puts out fewer boxes, you can add more without sinking the price.
• The Factory and the River — Waste flows into a river upstream, and the fishing village downstream pays for it. A 🏭 factory counts only its own cost. Society's true cost adds the damage done to the river. The market hears only the factory's cost and produces too much. A tax sized to the damage closes the gap. The cost-adding formula is below. For example, the upstream village dumps trash in the river, so 🧑 kids downstream cannot swim in it. The dumpers pay nothing, so they keep dumping. Charge a fine for each bag of trash, and the dumping shrinks.
• Tragedy of the Shared Pasture — Everyone grazes sheep on one shared pasture — watch why no grass survives. The pasture belongs to everyone; the sheep belong to each herder. The more sheep there are, the less grass each one eats. Still, each 🧑 herder counts only the profit from their own animals. So the total overshoots the right flock size, and the pasture's profit evaporates. The right size is in the formula below. For example, a class 📦 box holds 30 🍬 candies. Take just one a day and they last a whole month. If everyone grabs handfuls, the box is empty in three days. One simple rule — at most two each — keeps the candies alive.
• Why Does the Superstar Earn So Much? — A star singer's fee and land near a station split the same way — see why both are so high. The payment for a factor splits into two parts. What it could earn in its next job is transfer earnings. The pure bonus above that is economic rent. The harder a factor is to replace, the more of its pay hardens into rent. The formula below ties that to a steep supply. For example, a 🧑 singer nobody can replace gets a fee of 1,000,000 won. A karaoke singing job would pay only 100,000. The other 900,000 is pure rent. If that voice were common, the fee would sink toward 100,000.
• The Amusement Park Pricing Puzzle — Sell the same ride three ways: per ride, a flat pass, and a two-part tariff. Per-ride pricing charges like a monopolist and cuts use. A flat pass makes extra rides free, so guests overuse them. A two-part tariff splits the bill into an entry fee and a per-ride price. Price rides at cost and collect the leftover gain at the gate, and the waste vanishes. The payment formula is below. For example, running one ride costs the park 500 won. At 3,000 won a ride, 🧑 kids ride only twice. A 5,000-won entry fee plus 500 won a ride makes five rides feel fine. The park pockets its gain in the entry fee.
• Three Ways to Tax — Run one market under three taxes: lump-sum, specific, and ad valorem. A lump-sum tax is a fixed bill, so it never enters the price decision. Trade stays untouched. A specific tax drives a fixed wedge into every unit sold. An ad valorem tax widens the wedge by a share of the price. Only wedged taxes shrink trade and leave a loss triangle. The two wedge formulas are below. For example, three taxes visit a 🍬 candy shop. The lump-sum tax is 10,000 won a month, sold or not. The specific tax takes 100 won per candy. The ad valorem tax takes 10 percent of the price. Only the per-candy taxes raise the price and shrink how many get bought.
• Why Higher Prices Mean Buying Less — Except When They Don't — Split the response to a price rise into the two forces that drive it. The substitution effect pulls you away from the pricier good. The income effect is the feeling of a thinner wallet. Usually the two push the same way. For an inferior good, the income effect pushes back. For a survival staple like rice, it can win, so a higher price means buying more. The formula below adds the two forces. For example, a 10,000-won allowance buys 🍚 rice and 🍌 bananas. When rice gets pricier, bananas look cheap and you switch toward them. At the same time your allowance feels smaller, so you buy less overall. If rice matters too much to cut, you drop the bananas and buy even more rice.
• Why Good Used Cars Never Show Up — See why good used cars never show up on the market. Only the seller knows the quality. Buyers set their price by the average of whatever shows up. A low average makes good-car owners give up selling. So the average sinks further, and the price spirals down to zero. The same structure wears three faces: hidden quality, adverse selection, and moral hazard. In health insurance, healthy people leave first and premiums climb again. Banks trusting deposit insurance turn reckless after the deal. The average-quality formula is below. For example, a 🧑 classmate offers a used game console for 50,000 won. Only the seller knows whether it is broken. The nervous buyer offers just 30,000. Owners of working consoles will not sell at that price. Only the broken ones stay on the market.
• Winning the Auction, Losing Money — See why the winner of a coin-jar auction ends up the biggest loser. Each bidder's guess scatters around the true value. The winner is whoever guessed the highest. More bidders means the top guess puffs up even further. Winning itself is the news that you overestimated the most. The formula below sizes that puff. For example, a jar holds 100 🍬 candies, and 10 🧑 classmates each guess the count. One classmate guesses 130 and bids the highest, so they win. Inside are only 100, a loss equal to the 30-candy overcount.