Principles of Microeconomics Course Structure
BASIC ECONOMIC CONCEPTS: 8-14%
- Scarcity, choice, and opportunity cost
- Production possibilities curve
- Comparative advantage, specialization, and trade
- Economic systems
- Property rights and the role of incentives
- Marginal analysis
THE NATURE and FUNCTION OF PRODUCT MARKETS: 55-70%
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- Supply and Demand: 15-20%
- Market equilibrium
- Determinants of supply and demand
- Price and quantity of controls
- Elasticity
- Price, income, and cross-price elasticities of demand
- Price elasticity of supply
- Consumer surplus, producer surplus, and market efficiency
- Tax incidence and deadweight loss
- Theory of consumer choice: 5-10%
- Total utility and marginal utility
- Utility maximization: equalizing marginal utility per dollar
- Individual and market demand curves
- Income and substitution effects
- Production and Costs: 10-15%
- Production functions: short and long run
- Marginal product and diminishing returns
- Short-run costs
- Long-run costs and economies of scale
- Cost minimizing input combination
- Firm behavior and market structure: 23-33%
- Profit
- Accounting versus economic profits
- Normal profit
- Profit maximization: MR=MC rule
- Perfect competition
- Profit maximization
- Short-run supply and shut-down decision
- Firm and market behaviors in short-run and long-run equilibria
- Efficiency and perfect competition
- Monopoly
- Sources of market power
- Profit maximization
- Inefficiency of monopoly
- Price discrimination
- Oligopoly
- Interdependence, collusion, and cartels
- Game theory and strategic behavior
- Monopolistic competition
- Product differentiation and role advertising
- Profit maximation
- Short-run and long-run equilibrium
- Excess capacity and inefficiency
- Profit
- Supply and Demand: 15-20%
FACTOR MARKETS: 8-14%
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- Derived factor demand
- Marginal revenue product
- Labor market and firms’ hiring of labor
- Market distribution of income
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MARKET FAILURE and the ROLE OF GOVERNMENT 10-16%
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- Externalities
- Marginal social benefit and marginal social cost
- Positive externalities
- Negative externalities
- Remedies
- Public goods
- Public versus private goods
- Provision of public goods
- Public policy to promote competition
- Antitrust policy
- Regulation
- Income distribution
- Equity
- Sources of income inequality
- Externalities