Course Learning Outcomes

Microeconomics Learning Outcomes

The Learning Outcomes covered by these Microeconomics course materials are:

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
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
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)
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
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
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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Icon for the Creative Commons Attribution 4.0 International License

Microeconomics by Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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