Unit 2770: Microeconomic Theory and Market Structures

1. Introduction to Microeconomic Theory

• Definition and scope of microeconomics
• Basic principles: scarcity, opportunity cost, marginal analysis
• Key concepts:
  • Supply and demand curves
  • Market mechanisms
  • Role of individuals and firms in the economy

2. Market Equilibrium

• Definition of market equilibrium
• Equilibrium price and quantity
• Effects of shifts in supply and demand
• Price determination in different market conditions
• Case studies and graphical analysis

3. Elasticity of Demand and Supply

• Concept of elasticity
  • Price elasticity of demand
  • Price elasticity of supply
  • Income elasticity of demand
  • Cross-price elasticity
• Calculation and interpretation of elasticity coefficients
• Factors affecting elasticity
• Applications of elasticity in real-world economics

4. Consumer Theory

• Consumer preferences and utility
• Budget constraints and choice
• Utility maximization and consumer equilibrium
• Indifference curves and budget lines
• Income and substitution effects

5. Production Theory

• Inputs and outputs in production
• Short-run and long-run production functions
• Law of diminishing returns
• Costs of production:
  • Fixed, variable, and total costs
  • Marginal and average costs
• Profit maximization and production decisions

6. Perfect Competition

• Characteristics of perfectly competitive markets
  • Many buyers and sellers
  • Homogeneous products
  • Free entry and exit
• Price takers and market efficiency
• Short-run and long-run equilibrium in perfect competition

7. Monopoly and Monopolistic Competition

• Monopoly:
  • Characteristics and sources of monopoly power
  • Price setting and output decisions
  • Deadweight loss and inefficiency
• Monopolistic competition:
  • Product differentiation
  • Pricing and output decisions
  • Long-run equilibrium

8. Oligopoly and Game Theory

• Definition and characteristics of oligopoly markets
• Strategic interaction among firms
• Introduction to game theory concepts:
  • Nash equilibrium
  • Dominant strategies
  • Cooperative vs non-cooperative games
• Models of oligopoly behavior:
  • Cournot
  • Bertrand
  • Stackelberg

9. Market Failures and Externalities

• Definition and examples of market failures
• Externalities:
  • Positive and negative externalities
  • Effects on social welfare
  • Internalizing externalities: taxes, subsidies, regulation
• Public goods and free rider problem
• Imperfect information and asymmetric information
• Role of government intervention

10. Income Distribution and Welfare Economics

• Measures of income distribution and inequality
  • Lorenz curve
  • Gini coefficient
• Concepts of fairness and equity in economics
• Welfare economics principles
• Policies for improving social welfare:
  • Taxation
  • Transfers and subsidies
  • Minimum wage laws