Learning Objectives
5 objectives- Understand and explain fundamental microeconomic concepts including opportunity cost, supply and demand.
- Analyze consumer behavior and firm production decisions within different market structures.
- Evaluate market equilibrium and the effects of externalities and public goods on market efficiency.
- Assess income distribution issues and the role of economic policy and regulation in addressing market failures.
- Examine international trade theories and the impact of globalization on economic markets.
Content Outline
PreviewUnit 2512: Principles of Microeconomics and Market Analysis
1. Introduction to Microeconomics
- 1.1 The Basic Economic Problem
- Scarcity and choice
- Opportunity cost
- 1.2 Role of Markets
- Definition and functions of markets
- Market participants
- 1.3 Principles of Supply and Demand
- Law of demand and supply
- Determinants of supply and demand
- Market equilibrium
2. Consumer Behavior
- 2.1 Consumer Decision Making
- Preferences and budget constraints
- Utility and utility maximization
- 2.2 Consumer Equilibrium
- Marginal utility and optimal choice
- 2.3 Indifference Curves and Budget Lines
- Properties of indifference curves
- Deriving consumer equilibrium graphically
- 2.4 Price Elasticity of Demand
- Definition and calculation
- Factors affecting elasticity
- Applications of elasticity
3. Producer Theory
- 3.1 Production Decisions
- Production functions: short run and long run
- Law of diminishing returns
- 3.2 Cost Concepts and Curves
- Fixed, variable, total, average, and marginal costs
- Short-run and long-run cost curves
- 3.3 Revenue and Profit Maximization
- Total, average, and marginal revenue
- Profit maximization rule
4. Market Structures
- 4.1 Perfect Competition
- Characteristics
- Firm behavior and market outcomes
- 4.2 Monopoly
- Sources and characteristics
- Pricing and output decisions
- 4.3 Monopolistic Competition
- Product differentiation
- Short-run and long-run equilibrium
- 4.4 Oligopoly
- Characteristics and examples
- Strategic behavior and game theory basics
5. Market Equilibrium
- 5.1 Determination of Equilibrium Price and Quantity
- Interaction of supply and demand
- 5.2 Surplus and Shortage
- Causes and effects
- 5.3 Shifts in Supply and Demand
- Impact on equilibrium
- 5.4 Price Controls
- Price ceilings and floors
- Effects on markets
6. Externalities and Public Goods
- 6.1 Market Failures from Externalities
- Positive and negative externalities
- Social vs private costs and benefits
- 6.2 Public Goods
- Characteristics: non-excludability and non-rivalry
- Free rider problem
- 6.3 Government Intervention
- Taxes, subsidies, and regulation
- Tradable permits and Coase theorem
7. Income Distribution and Market Failure
- 7.1 Income Inequality and Poverty
- Measurement methods (Lorenz curve, Gini coefficient)
- Causes and consequences
- 7.2 Market Failures Related to Income Distribution
- Equity vs efficiency trade-offs
- 7.3 Policy Responses
- Progressive taxation, welfare programs
- Minimum wage laws
8. International Trade and Globalization
- 8.1 Benefits of International Trade
- Comparative advantage theory
- Gains from trade
- 8.2 Trade Restrictions
- Tariffs, quotas, and subsidies
- Economic impact of protectionism
- 8.3 Trade Agreements and Organizations
- WTO, regional trade agreements
- 8.4 Impact of Globalization
- Economic integration
- Effects on industries and consumers
9. Economic Policy and Regulation
- 9.1 Role of Government in Markets
- Promoting competition
- Addressing market failures
- 9.2 Taxation Principles
- Types of taxes
- Economic effects of taxation
- 9.3 Antitrust Laws and Regulation
- Preventing monopolies and collusion
- Regulatory agencies and their functions
- 9.4 Policies for Economic Efficiency and Equity
- Balancing growth and fairness
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