Learning Objectives
5 objectives- Understand fundamental economic concepts including scarcity, opportunity cost, and the economic problem.
- Differentiate between microeconomics and macroeconomics and their respective focuses.
- Analyze market mechanisms through supply and demand and various market structures.
- Evaluate consumer and producer behavior using elasticity, production, and cost theories.
- Examine market failures and the role of government interventions, as well as international trade and globalization impacts.
Content Outline
PreviewUnit 1170: Principles of Economics
1. Introduction to Economics
- Definition and scope of economics
- Scarcity and choice
- Opportunity cost: concept and examples
- The economic problem: unlimited wants vs. limited resources
2. Microeconomics vs. Macroeconomics
- Overview of microeconomics
- Focus on individual agents: consumers, firms
- Overview of macroeconomics
- Focus on aggregate economic measures: GDP, inflation, unemployment
- Key distinctions and interrelations
3. Supply and Demand
- Law of demand and factors affecting demand
- Law of supply and factors affecting supply
- Market equilibrium: price and quantity determination
- Shifts vs. movements along curves
- Applications and real-world examples
4. Market Structures
- Perfect competition
- Characteristics
- Price and output determination
- Monopoly
- Sources of monopoly power
- Pricing strategies and barriers to entry
- Oligopoly
- Interdependence among firms
- Models: collusion, price leadership
- Monopolistic competition
- Product differentiation
- Short-run and long-run equilibrium
5. Elasticity
- Price elasticity of demand
- Definition and calculation
- Determinants of price elasticity
- Income elasticity of demand
- Normal vs. inferior goods
- Cross-price elasticity (brief overview)
- Importance of elasticity in business and policy decisions
6. Production and Costs
- Factors of production
- Production functions: short-run and long-run
- Law of diminishing returns
- Cost concepts
- Fixed, variable, total, average, and marginal costs
- Relationship between costs and output levels
7. Consumer Behavior
- Consumer preferences and indifference curves
- Budget constraints
- Utility maximization
- Substitution and income effects
- Behavioral factors influencing consumer choices
8. Producer Theory
- Firm objectives: profit maximization
- Production functions and isoquants
- Cost minimization and input choices
- Short-run vs. long-run decisions
- Supply curve derivation
9. Market Failures and Government Interventions
- Types of market failures
- Externalities: positive and negative
- Public goods and free-rider problem
- Imperfect information
- Government intervention tools
- Taxes, subsidies, regulation
- Provision of public goods
- Antitrust policies
10. International Trade and Globalization
- Benefits of international trade
- Comparative advantage
- Gains from trade
- Trade policies and their effects
- Tariffs, quotas, trade agreements
- Challenges of globalization
- Economic disparities
- Environmental and social impacts
- Role of international organizations
- WTO, IMF, World Bank
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