| Module (Chapter) |
Learning Outcomes |
| Economic Thinking: Prepare for success in studying economics |
- Explain what economics is and explain why it is important
- Explain how economists use economic models
- Use mathematics in common economic applications
- Use graphs in common economic applications
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| Choice in a World of Scarcity: Use economic thinking to explain choice in a world of scarcity |
- Explain the cost of choices and trade-offs
- Illustrate society’s trade-offs by using a production possibilities frontier (or curve)
- Explain the assumption of rationality by individuals and firms
- Define marginal analysis
- Differentiate between positive and normative statements
|
| Supply and Demand: Analyze how buyers and sellers interact in a free and competitive market to determine prices and quantities of goods |
- Describe and differentiate between major economic systems
- Explain the determinants of demand
- Explain the determinants of supply
- Explain and graphically illustrate market equilibrium, surplus and shortage
|
| Elasticity: Measure how changes in price and income affect the behavior of buyers and sellers |
- Explain the concept of elasticity
- Explain the price elasticity of demand and price elasticity of supply, and compute both using the midpoint method
- Explain and calculate other elasticities using common economic variables
- Explain the relationship between a firm’s price elasticity of demand and total revenue
|
| Government Action: Evaluate the consequences of government policies in markets |
- Analyze the consequences of the government setting a binding price ceiling
- Analyze the consequences of the government setting a binding price floor
- Explain how the price elasticities of demand and supply affect the incidence of a sales tax
- Define progressive, proportional, and regressive taxes
|
| Surplus: Use the concept of producer, consumer surplus, and total surplus to explain the outcomes of markets for individuals, firms, and society |
- Define and calculate consumer, producer and total surplus; graphically illustrate consumer, producer and total surplus
- Use the concepts of consumer, producer and total surplus to explain why markets typically lead to efficient outcomes
|
| Utility: Explain how consumer behavior shapes the demand curve with respect to utility and loss |
- Define the concept of utility and satisfaction
- Differentiate between marginal utility and total utility
- Describe and calculate the concept of marginal utility
- Explain how consumers maximize total utility within a given income using the Utility Maximizing Rule
- Explain how consumer’s utility changes when income or prices change
- Describe the behavioral economics approach to understanding decision making
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| Production: Analyze the relationship between inputs used in production and the resulting outputs and costs |
- Define the term “production” and explain what a production function is; define the term “production inputs,” and differentiate between labor, land, capital, entrepreneurship, technology
- Define and differentiate between marginal, average, and total product; compute and graph marginal, average, and total product; explain diminishing marginal product and diminishing marginal returns
- Differentiate between Explicit and Implicit Costs, Accounting and Economic Profit
- Identify sunk costs
- Define and differentiate between marginal, average, and total cost; compute and graph marginal, average, and total cost; differentiate between variable and fixed costs
- Differentiate between short-run and long-run costs; interpret the relationship between short-run and long-run costs
- Define and explain long-run costs, economies of scale, diseconomies of scale, and constant returns to scale
|
| Perfect Competition: Analyze a firm’s profit maximizing decisions under conditions of perfect competition |
- Define the characteristics of Perfect Competition
- Understand the difference between the firm and the industry; explain and illustrate the differences between the demand curve for a perfectly competitive firm and that for a perfectly competitive industry
- Calculate and graph the firm’s fixed, variable, average, marginal and total costs; calculate and graph the firm’s average, marginal and total revenues; determine the profit maximizing output level and price using graphs and demand schedules; is able to calculate and graphically illustrate where marginal revenue equals marginal costs
- Measure variable and total costs as the area under the average variable and average total cost curves; measure total revenues as the area under the average revenue curves; calculate and graphically illustrate profit and losses for a perfectly competitive firm
- Determine the break-even, and the shutdown points of production for a perfectly competitive firm
- Explain the difference between short-run and long-run equilibrium; explain the concept of “zero economic profit”
- Understand why perfectly competitive markets are efficient
|
| Monopoly: Analyze a firm’s profit maximizing strategies under conditions of a monopoly |
- Define the characteristics of a monopoly
- Define and explain the sources of barriers to entry
- Calculate and graph a monopoly’s fixed, variable, average, marginal and total costs; measure variable and total costs as the area under the average variable and average total cost curves; calculate and graph the firm’s average, marginal and total revenues; measure total revenues as the area under the average revenue curves; determine the profit maximizing output level and price; is able to calculate and graphically illustrate where marginal revenue equals marginal costs; calculate and graphically illustrate profit and losses for a monopolist
- Explain why a monopoly is inefficient using deadweight loss; differentiate between a single price monopolist and a price discriminating monopolist
- Analyze different strategies to control monopolies, including natural monopolies
|
| Oligopoly: Analyze a firm’s profit maximizing strategies under conditions of oligopoly |
- Define characteristics of oligopolies
- Explain why collusion can occur in oligopolistic industries
- Explain the role of game theory in understanding the behavior of oligopolies
- Explain why oligopolies are inefficient
|
| Monopolistically Competitive Industries: Analyze a firm’s profit maximizing strategies under conditions of monopolistic competition |
- Define the characteristics of a monopolistically competitive industry; understand the difference between the firm and the industry
- Calculate and graph the firm’s fixed, variable, average, marginal and total costs; measure variable and total costs as the area under the average variable and average total cost curves; calculate and graph the firm’s average, marginal and total revenues; measure total revenues as the area under the average revenue curves; determine the profit maximizing output level and price; is able to calculate and graphically illustrate where marginal revenue equals marginal costs; calculate and graphically illustrate profit and losses for a monopolistically competitive firm
- Explain the difference between short run and long run equilibrium in a monopolistically competitive industry
- Understand how product differentiation works in monopolistically competitive industries and how firms use advertising to differentiate their products, understanding impact on elasticity
- Understand why monopolistically competitive markets are inefficient (including deadweight loss)
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| Public Goods: Compare public goods and private goods and understand the role for them in the economy |
- Contrast between public and private goods
- Explain the concept of free riders
- Define and give examples of positive and negative externalities
- Analyze the efficacy of government policies to lessen negative externalities and analyze how the government promotes positive externalities
- Analyze the impact of market-based solutions to negative externalities
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| Globalization, Trade, and Finance: Analyze the benefits and costs of international trade |
- Define and calculate comparative and absolute advantage
- Explain how a nation’s workers and consumers are affected by impact of international trade
- Understand the way government regulations (e.g. tariffs, quotas and non-tariff barriers) affect business, consumers and workers in the economy
- Differentiate between alternative international trade regimes and how they impact global trade
- Define currency exchange rates and explain how they influence trade balances
- Explain how the balance of trade (surplus or deficit) affects the domestic economy, and how the domestic economy affects the balance of trade
- Connect globalization, international trade, and international finance
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| Income Distribution: Assess how resource markets/factors of production affect society’s distribution of income |
- Describe the incomes earned by the factors of production (land, labor, capital, entrepreneurship) wages, interest, rents, and profit
- Analyze how perfect/imperfect competition between buyers and sellers of factors can impact wages, interest, and rents
- Use the Lorenz Curve to analyze the distribution of income and wealth
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