Contents
Microeconomics
Rationale
Economics (from the Greek οίκος [oikos], 'family, household, estate', and νομος [nomos], 'custom, law', hence "household management" and "management of the state") is a social science that typically studies the production, distribution, and consumption of goods and services. Since the early part of the 20th century, economics has focused largely on measurable variables, and employed both theoretical models and empirical analysis[1]. Economic logic is increasingly applied to any problem determining economic value (such as politics, religion, psychology, history and dating). A professional working in economics or having an academic degree in the subject is an economist.
The subject is broadly divided into two main branches: microeconomics, which deals with individual agents, such as households and businesses, and macroeconomics, which considers the economy as a whole. An alternate division of the subject distinguishes positive economics, which tries objectively to predict and explain economic phenomena, from normative economics, which recommends one choice over another—such recommendations often involve subjective value judgments. The mainstream economic paradigm is a combination of neoclassical economics and Keynesian macroeconomics. Crucial assumptions of this paradigm include the idea that resources are scarce while wants are unlimited, which is sometimes characterized as the economic problem, and an understanding that the value of most goods can be represented in terms of their open-market price. Various schools of heterodox economics, for instance socialist economics, green economics and associative economics, seek to explain economic phenomena using different basic assumptions, for example by emphasising that economics is primarily concerned with exchanges of values.
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Teaching and Learning Resources
What Is Economics? Key Principles of Economics
The session introduces the student to economics. Among other topics, the student will be exposed to positive and normative statements, common fallacies, graphs and their use in economics, and the economic method and more specifically to various cost stuctures and concepts.
It describes the basic problem in economics, which is that since resources are scarce, people are forced to make choices. The student is introduced to various economic systems, and the concept of scarcity is represented graphically by Production Possibilities curves.
Workshop
Supply, Demand, and Market Equilibrium. Utility and Demand
In this very important unit the student is introduced to the concepts of supply, demand, markets, equilibrium, shortages, and surpluses. This unit also exposes the student to all the other factors, besides the price of a good or service, that also affect the supply of or demand for that good or service. Then the student will learn how to use basic supply and demand analysis to predict changes in markets. Finally, this unit of the course describes two ways in which the government interferes with the free exchange, in markets, between producers and consumers - price supports and price ceilings.
This unit introduces the student to the concept of utility, marginal utility, and the Law of Diminishing Marginal Utility. These concepts are then shown, in a crude fashion, to be the basis for the Law of Demand.
Tutorials
Readings
Elasticity: A Measure of Responsiveness
This session will explain to the student the ways economists try to measure the response of people to changes in economic variables, a concept known as elasticity. Four types of elasticities will be described - price elasticities of demand and supply, income elasticities, and cross elasticities, with an emphasis on the price elasticity of demand. In addition, students are shown how these tools can be used to determine how much of an excise tax can be passed on from the seller to the buyer.
Tutorials
Readings
Consumer Choice
Tutorials
Readings
Production and Cost
This week introduces the student to a host of concepts that will be used in later units, including explicit and implicit costs, accounting and economic profit, short and long run, marginal product, diminishing returns, average cost, marginal cost, and economies of scale. For the first time the student will be exposed to the short-run cost curves for a typical firm wich will form the basis for the analysis of units 7 through 9. Costs in the long run will also be described.
Tutorials
Readings
- Total Cost, Variable Cost, and Marginal Cost
- Marginal Cost and the Price-Taking Firm's Optimal Output Rate
- Average Cost and the Break-Even Output Rate
Perfect Competition: Short Run and Long Run
In this very important unit, the student will become very familiar of the economic model which describes how firms in this kind of a market make their choices, in both the short and the long run. This is graph-intensive unit. Students will learn how firms that sell in perfectly competitive markets adjust to changing demand conditions. Also in this unit will be an introduction to the concepts of productive and allocative efficiency.
The students will also learns of the other extreme form of market - monopoly. Sources of monopoly power are identified, the model of choice in monopoly is described, and some instances of desirable monopolies are discussed. Finally, monopoly and perfect competition are compared.
Tutorials
Readings
Monopoly. Entry and Monopolistic Competition
This topic includes the final market types - monopolistic competition and oligopoly. The former describes a market similar to perfect competition, the difference being that in monopolistic competition the firms produce differentiated products. The unit describes the economic model of how firms in this kind of market make their choices and compares this market with perfect competition and monopoly. Oligopoly is big business - markets that contain only a small number of relatively large firms. The unit will also describe the public policies that has been put into place to try to reduce the power of big business - in particular, antitrust laws.
Tutorials
Readings
International Trade. Markets and Government in the Global Economy
Why do nations trade with each other? How important is trade to your country and other nations of the world? In what ways do the worlds' governments interfere with free trade? What is a tariff? All of these questions, and more, are addressed this week.
Tutorials
Readings
Oligopoly and Strategic Behavior. Chapter 13: Using Market Power: Price Discrimination and Advertising
Tutorials
Readings
Resource Markets
Earlier in the module we have analyzed firms in their role as seller of goods and services and households in their role of buyer of goods and services. This final session reverses the roles - firms, in resource markets, buy, while it is the households who sell. The choices that are made in resource market are analyzed. Non-competitive resource markets such as those involving unions and those involving a small number of buyers are also examined.
Tutorials
Readings
Recommended Texts
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Microeconomics: Principles, Applications and Tools
Check the availability and buy your books from our Bookshop. |
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Economics, 6e Arnold,
Roger A. Check the availability and buy your books from our Bookshop. |
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Microeconomics:
Behavior, Institutions, and Evolution
Samuel Bowles Check the availability and buy your books from our Bookshop. |
Resources
- Business and Economics
- Economics Gateway
- Economics Resources
- Internet Resources in Business & Economics
- Law and Economics Resources
- Mind your Business
- Resources
for Economists on the Internet
- Statistical Resources on the Web Comprehensive Economics
- The Information Economy
- World Economics Web Resources
- World Wide Web Resources in Economics