1. The Economic Problem
Factors of Production, The Three Fundamental Questions of Economics, Opportunity Cost, Micro & Macroeconomics, Production Possibilities Curve (PPC). Reading: Chapter 1
2. Demand & Supply: An Introduction
Demand & Quantity Demanded, Supply & Quantity Supplied, Income Effect & Substitution Effect, Market Equilibrium, Determinants and Effects of a Change in Demand, Determinants and Effects of a Change in Supply. Reading: Chapter 2
3. Demand & Supply: An Elaboration
Simultaneous Changes in Demand and Supply, Price Controls. Reading: Chapter 3
4. Elasticity
Price Elasticity of Demand, Determinants of Price Elasticity, Elasticity & Total Revenue, Some Applications of Price Elasticity, Elasticity of Supply, Income Elasticity. Reading: Chapter 4
5. Consumer Choice
The Law of Diminishing Marginal Utility, TU and MU, Optimal Purchasing Rule, MU of Money, Consumer Surplus, Price Discrimination. Reading: Chapter 5
6. A Firm’s production Decisions & Costs in the Short Run
Explicit & Implicit costs; Normal & Economic Profits; The Theory of Production Total, Average & Marginal Product; TC, TVC and TFC; AC (or ATC), AVC, AFC and MC; Economic Capacity. Reading: Chapter 6
7. Costs in the Long Run
The Long Run; Constant Returns to Scale, Economies & Diseconomies of Scale; The Right Size of Firm. Reading: Chapter 7
8. Perfect Competition
Characteristics of Different Markets; Perfect Competition and the Market System; Price, Output & Profit Under Perfect Competition; The Effect on Production and Profits of a Change in Price; Break-Even Price & Shutdown Price; The Firm’s Supply Curve; The Industry Demand and Supply. Reading: Chapter 8
9. An Evaluation of Competitive Markets
How Competitive Markets Adjust to Long-Run Changes; The Benefits of Perfect Competition; Market Failures; Dealing with External Costs; Integrating External Benefits. Reading: Chapter 9
10. Monopoly
Monopoly, Natural Monopoly, Socially Optimum Price, Fair-Return Price, Profit-Maximizing Output for the Monopolist, What’s So Bad about Monopoly? Controlling the Monopolist. Reading: Chapter 10
11. Imperfect Competition
Product Differentiation; Difference between the two types of Imperfect Competition; Monopolistic Competition; The Franchise Phenomenon & Blocked Entry; Oligopoly; The Cartel Variant. Reading: Chapter 11
12. The Factors of Production
The Labour Market, The Firm’s Equilibrium Quantity in a Competitive Labour Market, Wage Differentials, Economic Rent & Transfer Earnings. Reading: Chapter 12
13. International Trade
Specialization and Trade; Absolute and Comparative Advantages, The Terms of Trade, Gains from Trade, Production Possibilities and Trading Possibilities, The Benefits of Free Trade, Protectionism -Tariff and Quota. Reading: Chapter 13