Unit 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