|Topic ||Lesson Topic ||Subtopics ||Objectives
||Limits, Alternatives, and Choices
- The Economic Perspective
- Theories, Principles, and Models
- Macroeconomics and Microeconomics
- The Economizing Problem
- Production Possibilities Curve
- Identify and describe three interrelated features of how economists think about the world.
- Define opportunity cost and provide an example.
- Differentiate between a theory, a principle, and a model.
- Explain the usefulness of the "other-things-equal" assumption in economics analysis.
- State the difference between Macroeconomics and Microeconomics.
- Explain the difference between positive and normative economics.
- Explain the Economizing Problem as it relates to the individual and to society.
- Explain the message of the basic production possibilities curve.
- Represent a relationship between two variables with a graph.
||The Market System and Circular Flow
- Economic Systems
- Characteristics of the Market System
- Five Fundamental Questions
- The Circular Flow Model
- Define economic system and explain the function of systems.
- Identify two major economic systems.
- Identify and explain the characteristics of the market system.
- Identify and explain the five questions all economic systems must address.
- Analyze the Circular Flow Model.
- Explain why Adam Smith believed the "invisible hand" would promote the public or social interest.
- Analyze the Circular Flow Model in terms of its various components.
||Demand, Supply, and Market Equilibrium
- Market Equilibrium
- Describe markets and their function.
- Explain the inverse relationship between price and quantity demanded under the "all else equal" assumption.
- Identify the determinants of demand.
- Explain and graphically illustrate the difference between a change in quantity demanded and a change in demand.
- Explain the positive relationship between price and quantity supplied under the "all else equal" assumption.
- Identify the determinants of supply.
- Explain and graphically illustrate the difference between a change in quantity supplied and a change in supply.
- Explain and graphically illustrate market equilibrium.
- Explain the difference between production efficiency and allocation efficiency.
- Apply demand and supply analysis to real-world issues and problems.
||The U.S. Economy: Private and Public Sectors
- U.S. Households
- U.S. Businesses and Business Organization
- The Public Sector and Role of Government
- The Circular Flow Model With Government
- Government Budget Outlays and Receipts
- Describe the functional distribution of U.S. income.
- Describe the personal distribution of U.S. household income.
- Describe the disposition of U.S. household income.
- State the difference between the various legal forms of business.
- Identify the economic functions of governments.
- Analyze the Circular Flow Model that includes the government sector.
||The United States in the Global Economy
- International Trade
- Specialization and Comparative Advantage
- The Foreign Exchange Market
- Government and Trade
- Trade Organizations and Agreements
- Analyze the economic flows that link the U.S. and the economies of other nations.
- Describe U.S. export and import data as a percent of GDP over time.
- Define comparative advantage and use a table to illustrate the concept.
- Construct a table illustrating the gains from specialization.
- Use a demand and supply model to show how exchange rates are determined.
- Use a demand and supply model to illustrate currency appreciation and depreciation.
- Identify common trade barriers imposed by governments and explain why governments interfere with trade.
- Compare and contrast the notable trade organizations and agreements.
- Analyze global competition.
||Extension of Demand and Supply Analysis
- Price Elasticity of Demand
- Price Elasticity of Supply
- Cross Elasticity of Demand
- Income Elasticity of Demand
- Consumer and Producer Surplus
- Deadweight Loss
- Calculate price elasticity of demand using the mid-point and the percentage formulas.
- Interpret the price elasticity demand coefficient.
- Explain and illustrate the total revenue test.
- Compare and contrast inelastic and elastic demands.
- Explain what determines price elasticity of demand.
- Apply price elasticity of demand to real-world issues.
- Contrast the short-run and the long-run with respect to price elasticity of supply.
- Apply price elasticity of supply to real-world issues.
- Use cross-price elasticity of demand to define substitute goods, complementary goods, and independent goods.
- Compare and contrast consumer and producer surplus.
- Illustrate deadweight losses due to over- or under-production of an economic good.
||Consumer Behavior and Utility Maximization
- Consumer Choice and Budget Constraint
- Utility Maximization and the Demand Curve
- Explain and illustrate The Law of Diminishing Marginal Utility.
- Use The Law of Diminishing Marginal Utility to explain the shape of a typical demand curve.
- Use the utility-maximizing rule to determine how a consumer will allocate a fixed income in the purchase of two goods.
- Use the utility-maximization rule to derive the demand for a product.
- Explain the income and substitution effects.
- Use the theory of consumer behavior to explain real-world phenomena.
||The Costs of Production
- The Meaning of Cost in Economics
- The Meaning of Profit in Economics
- The Short Run and Long Run
- The Law of Diminishing Returns
- Short- and Long-Run Production Costs
- Scale Economics
- Analyze a firm's response to a change in demand in both the shortand long run.
- Explain how the Law of Diminishing Returns impacts a firm's short-run costs.
- Compare and contrast Economies and Diseconomies of scale.
- Characteristics of Pure Competition
- Short-run Profit Maximization
- Long-Run Profit Maximization
- Pure Competition and Efficiency
- Identify the characteristics of the representative firm operating under the conditions of pure competition.
- Analyze the demand faced by the purely competitive firm.
- Calculate the purely competitive firm's level of production and profit (or loss) in the short run using two methods.
- Explain the condition under which the purely competitive firm will shut down in the short run.
- Derive the competitive firm's short-run supply curve.
- Analyze the purely competitive firm's long-run equilibrium.
- Compare and contrast constant-cost, increasing-cost, and decreasing-cost industries.
- Explain the efficiency implications of pure competition.
- Characteristics of Pure Monopoly
- Monopoly Demand
- Monopoly Output and Price Determination
- Efficiency Implications of Pure Monopoly
- Price Discrimination
- The Regulated Monopoly
- Compare and contrast the characteristics of pure monopoly with those of pure competition.
- Compare and contrast the demand curve and marginal revenue curve of the monopolist with that of the purely competitive firm.
- Use the MR=MC rule to determine the monopolist's profit maximizing price and output.
- Analyze the economic effects of monopoly.
- Define price discrimination.
- Identify real-world examples of price discrimination.
- Analyze the various ways monopoly is regulated.
||Monopolistic Competition and Oligopoly
- Characteristics of Monopolistic Competition
- Price and Output Determination in Monopolistic Competition
- Monopolistic Competition and Efficiency
- Characteristics of Oligopoly
- Game Theory
- Models of Oligopoly
- Oligopoly and Efficiency
- Compare and contrast the characteristics of monopolistic competition with those of pure competition.
- Use the MR=MC rule to determine the monopolistically competitive firm's output and price in the short and long run.
- Analyze the efficiency implications of the monopolistically competitive market.
- Identify the conditions that lead to oligopoly.
- Analyze concentration ratios across industries.
- Use Game Theory to explain pricing behavior in oligopolistic markets.
- Analyze three models of Oligopoly.
- Analyze the efficiency implications of oligopoly.
||Technology, R&D, and Efficiency
- Invention, Innovation, and Diffusion
- Research and Development
- Imitation and R&D Incentives
- Market Structure and Technological Advance
- Compare and contrast Invention, Innovation, and Diffusion.
- Explain the modern view of technological advance.
- Use marginal analysis to determine the firm's optimal amount of R&D.
- Explain how dominant firms use the fast-second strategy to maximize profit.
- Identify the strengths and weaknesses of each market structure with respect to technological advance.
- Present a real-world example of creative destruction.
||The Demand for Resources
- Marginal Productivity Theory
- Resource Demand Under Imperfect Product Market Competition
- Determinants of Resource Demand
- Elasticity of Resource Demand
- Optimal Combination of Resources
- Marginal Productivity Theory of Income Distribution
- Derive the demand for resources in perfectly competitive and imperfectly competitive markets.
- Explain how changes in the determinants of resource demand impact the demand for resources.
- Analyze current trends in employment.
- Explain the main determinants of resource demand elasticity.
- Determine the optimal combination of resources using two methods.
- List criticisms of The Marginal Productivity Theory of Income Distribution.
- Labor, Wages, and Earnings
- Perfect Competition in the Labor Market
- Imperfect Competition in the Labor Market
- The Minimum Wage Debate
- Wage Differentials
- Compare and contrast Invention, Innovation, and Diffusion.
- Distinguish between nominal wages and real wages.
- Describe the relationship between real wages and productivity.
- Analyze wage determination in a purely competitive labor market.
- Compare and contrast the monopsony model of wage determination with that of the purely competitive model.
- Use the bilateral monopoly model to explain wage and employment determination.
- State a case for and against the minimum wage.
||Rent, Interest, and Profit
- Economic Rent
- Economic Profit
- Explain the existence of economic rent.
- Use a Loanable Funds Model to explain how interest rates are determined.
- Analyze the sources of economic profit.
- Explain the economic function of profit.
||Government and Market Failure
- Public Goods
- Compare and contrast private goods and public goods.
- Use the MB=MC rule to determine the optimal quantity of public goods.
- Define positive and negative externalities.
- Use the Coase Theorem to analyze a real-world individual bargaining example.
- Explain various ways in which government can bring about efficiency in the face of externalities.
||Public Choice Theory and the Economics of Taxation
- Revealed Preferences
- Government Failure
- Apportioning Tax Burdens
- Tax Incidence and Efficiency Loss
- Explain how majority voting may produce inefficiencies.
- Explain how majority voting may bring on results that violate voter preferences.
- Explain why rent seeking occurs.
- Contrast progressive, proportional, and regressive taxes.
- Analyze the relationship between elasticity and tax incidence.
- Illustrate the efficiency loss of a tax.
||Antitrust Policy and Regulation
- The Antitrust Laws and Policy
- Effectiveness of Antitrust Laws
- Natural Monopoly
- Social Regulation
- Describe the most important of the antitrust laws of the U.S. and the historical events leading to the passing of these laws.
- Describe inconsistencies in antitrust policy.
- Calculate a Herfindahl Index from data provided.
- Analyze the conditions that result in the existence of natural monopoly.
- Explain the economic argument for deregulation.
- Use the MB=MC rule to determine the optimal level of social regulation.
- State the main criticisms of social regulation.
||Agriculture: Economics and Policy
- The Economics of Agriculture
- Economics of Farm Policy
- Criticisms and Politics
- Recent Reform
- Present the economics behind the volatility of price and income in the agriculture sector.
- Present the economics behind the belief that agriculture is a declining industry in the long run.
- Present an economic argument for farm subsidies.
- Define parity and give a real-world example.
- Use a demand and supply model to show the impact of an effective commodity price support program.
- Use public choice theory to explain why agriculture continues to receive favorable support from government in spite of the strong arguments against doing this.
||Income Inequality and Poverty
- Facts About Income Inequality
- Causes of Income Inequality
- Income Inequality Over Time
- Equality versus Efficiency
- U.S. Income Maintenance System
- Construct a Lorenz Curve and calculate Gini Coefficients and interpret both.
- Analyze the causes of income inequality.
- Present historical data on income inequality.
- State the trade-off between equality and efficiency.
- Define poverty and delineate the incidence of poverty.
- Analyze the U.S. Income-Maintenance System
||The Economics of Health Care
- Costs and Access
- High and Rising Health Care Costs
- Why Costs Are Rising So Rapidly
- Health Care Reform
- Present current statistics relative to the health care industry.
- Analyze the health care industry and explain why costs are rising so rapidly in that industry.
- Use a demand and supply diagram to show why health care costs are rising so rapidly.
- Use a demand and supply diagram to show that resources are over-allocated to health care when insurance is available.
- List various options to health care reform.
||Labor Market Institutions and Issues
- Unionism in America
- Economic Effects of Unions
- Labor Market Discrimination
- Economic Analysis of Discrimination
- Present current statistics relative to unionism in America and abroad.
- Define important terms relative to unionism.
- State ways in which unions may decrease economic efficiency.
- State ways in which unions may increase economic efficiency.
- Define labor market discrimination and identify the types of discrimination that may occur.
- Use a demand model to show that if immigration increases from Mexico to the U.S. then world production increases and business income is enhanced.
- Some current statistics
- The Economic Basis for Trade
- Comparative Advantage
- Supply and Demand Analysis of Exports and Imports
- Trade Barriers
- The Case for Protection
- Present current statistics regarding U.S. international trade.
- Present the economic basis for trade.
- Determine comparative advantage from information implicit in two PPCs.
- Determine terms of trade from information implicit in two PPCs.
- Determine gains from trade from information implicit in two PPCs.
- Delineate a case for free trade.
- Use a demand and supply diagram to show that as world prices increase relative to domestic prices, U.S. exports rise.
- Use a demand and supply diagram to show that as world prices decrease relative to domestic prices, U.S. imports rise.
- Analyze the economic impact of trade barriers.
||Exchange Rates, the Balance of Payments, and Trade Deficits
- The Balance of Payments
- Flexible Exchange Rates
- Fixed Exchange Rates
- International Exchange Rate Systems
- Recent U.S. Trade Deficits
- Explain the Balance of Payments in terms of each of its accounts.
- Analyze the offsetting transactions that cause the Balance of Payments to always sum to zero.
- Use demand and supply diagrams to illustrate currency appreciation and depreciation.
- List the determinants of exchange rates.
- State the case for flexible exchange rates and potential problems with this case.
- State the case for fixed exchange rates and potential problems with this case.
- Compare and contrast the various international exchange rate systems.
- Analyze recent U.S. trade deficits.
- Supply and Demand
- Elasticity of Supply and Demand
- Pure Competition and Monopolies
- The Cost of Production
- International Trade Policy
- Wage Determination
- Monopolistic Competition and Oligopoly
- Government and Market Failures
- Antitrust Policy and Regulation
- Agricultural Economics and Politics
- Income Inequity and Poverty
- Rent, Interest, and Profit