|Topic ||Lesson Topic ||Subtopics ||Objectives
||Thinking Like an Economist
- Cost-Benefit Principle
- The Scarcity Principle
- Macroeconomics and Microeconomics
- The Economizing Problem
- Define opportunity cost and provide an example.
- Explain the usefulness of the “other-things-equal” assumption in economics analysis,
- State the difference between Macroeconomics and Microeconomics.
- Explain the problem of unlimited needs and wants 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.
- International Trade
- Specialization and Comparative Advantage
- Government and Trade
- Trade Barriers
- Trade Agreements
- Production Possibilities
- Define comparative advantage and use a table to illustrate the concept.
- Describe the gains from specialization and explain how exchange rates are determined.
Identify common trade barriers imposed by governments and explain why governments interfere with trade.
- Analyze the economic impact of trade barriers.
- Describe notable trade agreements.
- Explain the difference between positive and normative economics.
- Determine comparative advantage.
- Determine comparative advantage from information implicit in two PPCs.
- Delineate a case for free trade.
||Supply and Demand
- Economic Systems
- Characteristics of the Market System
- Market Equilibrium
- Identify two major economic systems.
- Identify and explain the characteristics of the market system.
- Describe markets and their function.
- Explain the relationship between price and quantity demanded.
- Identify the determinants of demand.
- Explain and graphically illustrate the difference between a change in quantity demanded and a change in demand.
- 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 Efficacy Principle.
- Apply demand and supply analysis to real-world issues and problems.
- Explain the income and substitution effects.
- Price Elasticity of Demand
- Price Elasticity of Supply
- Cross Elasticity of Demand
- Income Elasticity of Demand
- Calculate price elasticity of demand using the mid-point and the percentage formulas.
- 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.
- Explain cross-price elasticity and income elasticity of demand.
- Consumer Choice and Budget Constraint
- Rational Spending and the Demand Curve
- Consumer Surplus
- Optimal Combination of Resources
- 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 Rational Spending Rule to determine how a consumer will allocate a fixed income in the purchase of two goods.
- Use the Rational Spending Rule to derive the demand for a product.
- Explain the income and substitution effects.
- Describe consumer surplus.
- Determine the optimal combination of resources using two methods.
||Perfectly Competitive Supply
- Characteristics of Perfect Competition
- Short-Run Profit Maximization
- Long-Run Profit Maximization
- Producer Surplus
- Identify the characteristics of the representative firm operating under the conditions of perfect competition.
- Analyze the demand faced by the perfectly 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 perfectly competitive firm with shut down in the short run.
- Derive the competitive firm’s short-run supply curve.
- Analyze the perfectly competitive firm’s long-run equilibrium.
- Describe producer surplus.
||Efficiency, Exchange, and the Invisible Hand
- Economic Profit
- Economic Rent
- Analyze the sources of economic profit.
- Explain the economic function of profit.
- Explain the existence of economic rent.
- Explain why Adam SMith believed the “invisible hand” would promote the public or social interest.
||Monopoly, Oligopoly, and Monopolistic Competition
- Characteristics of Pure Monopoly
- Monopoly Demand
- Monopoly Output and Price Determination
- Efficiency Implications of Pure Monopoly
- Price Discrimination
- Public Policy
- The Regulated Monopoly
- Characteristics of Monopolistic Competition
- Price and Output Determination in Monopolistic Competition
- Monopolistic Competition and Efficiency
- Characteristics of Oligopoly
- Models of Oligopoly
- Oligopoly and Efficiency
- The Antitrust Laws and Policy
- Effectiveness of Antitrust Laws
- Natural 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 public policies toward natural monopoly
- 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 three models of Oligopoly.
- Analyze the efficiency implications of oligopoly.
- 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 policies.
- Analyze the conditions that result in the existence of natural monopoly.
||Games and Strategic Behavior
- Game Theory
- The Prisoner’s Dilemma
- Use Game Theory to explain pricing behavior in different markets.
- Apply the Prisoner’s Dilemma to real-world scenarios.
- Provide examples when of when timing matters in a game.
||Externalities and Property Rights
- Private Ownership
- 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.
- Describe how private ownership prevents the “tragedy of the commons.”
||The Economics of Misinformation
- Economic Value
- The Cost-Benefit Test
- Asymmetric Information
- Explain how buyers and sellers can create real economic value.
- Identify the optimal amount of information by applying the Cost-Benefit Principle.
- Define Asymmetric information.
- Describe how asymmetric information contributes to the lemons problem.
- Explain the responses to asymmetric information problems.
||Labor Markets, Poverty, and Income
- Labor, Wages, and Earnings
- Perfect Competition in the Labor Market
- Imperfect Competition in the Labor Market
- The Minimum Wage Debate
- Wage Differentials
- Facts About Income Inequality
- Causes of Income Inequality
- Income Inequality Over Time
- Economic Effects of Unions
- Labor Market Discrimination
- Economic Analysis of Discrimination
- Marginal Productivity Theory
- Deadweight Loss
- Distinguish between nominal wages and real wages.
- Describe the relationship between real wages and productivity.
- Analyze wage determination in a purely competitive labor market.
- State a case for and against the minimum wage.
- Analyze the causes of income inequality.
- Present historical data on income inequality.
- Define poverty and delineate the incidence of poverty.
- 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.
- Explain how changes in the determinants of resource demand impact the demand for resources.
- Illustrate deadweight losses due to over- or under-production of an economic good.
||The Environment, Health, and Safety
- Costs and Access
- High and Rising Health Care Costs
- Why Costs Are Rising So Rapidly
- Health Care Reform
- Workplace Safety
- 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 cost-benefit criterion to show why health care costs are rising so rapidly.
- List various options to health care reform.
- Discuss the ways in which taxes and tradeable permits can reduce pollution.
- Apply the Cost-Benefit Principle to improve workplace safety.
||Public Goods and Tax Policy
- Public Goods
- Tax Incidence and Efficiency Loss
- Compare and contrast private goods and public goods.
- Use the MB=MC rule to determine the optimal quantity of public goods.
- 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.