Course Schedule

This schedule might change, but this is a good overview of the pace.

chapter 2: Choice in a world of scarcity

• How Individuals Make Choices Based on Their Budget Constraints

  • Calculate and graph budget constraints

  • Explain opportunity sets and opportunity costs

  • Evaluate the law of diminishing marginal utility

  • Explain how marginal analysis and utility influence choices

• The Production Possibilities Frontier and Social Choices

  • Interpret production possibilities frontier graphs

  • Contrast a budget constraint and a production possibilities frontier

  • Explain the relationship between a production possibilities frontier and the law of diminishing returns

  • Contrast productive efficiency and allocative efficiency

  • Define comparative advantage

• Confronting Objections to the Economic Approach

  • Analyze arguments against economic approaches to decision-making

  • Interpret a tradeoff diagram

  • Contrast normative statements and positive statements

chapter 4: labor and financial markets

• Demand and Supply at Work in Labor Markets

  • Predict shifts in the demand and supply curves of the labor market

  • Explain the impact of new technology on the demand and supply curves of the labor market

  • Explain price floors in the labor market such as minimum wage or a living wage

• Demand and Supply in Financial Markets

  • Identify the demanders and suppliers in a financial market

  • Explain how interest rates can affect supply and demand

  • Analyze the economic effects of U.S. debt in terms of domestic financial markets

  • Explain the role of price ceilings and usury laws in the U.S.

• The Market System as an Efficient Mechanism for Information

  • Apply demand and supply models to analyze prices and quantities

  • Explain the effects of price controls on the equilibrium of prices and quantities

CHAPTER 6: CONSUMER CHOICES

• Consumption Choices

  • Calculate total utility

  • Propose decisions that maximize utility

  • Explain marginal utility and the significance of diminishing marginal utility

• How Changes in Income and Prices Affect Consumption Choices

  • Explain how income, prices, and preferences affect consumer choices

  • Contrast the substitution effect and the income effect

  • Utilize concepts of demand to analyze consumer choices

  • Apply utility-maximizing choices to governments and businesses

• How Consumer Choices Might Not Always be Rational

  • Evaluate the reasons for making intertemporal choices

  • Interpret an intertemporal budget constraint

  • Analyze why people in America tend to save such a small percentage of their income

CHAPTER 7: PRODUCTION, COSTS, AND INDUSTRY STRUCTURE

• Explicit and Implicit Costs, and Accounting and Economic Profit

  • Explain the difference between explicit costs and implicit costs

  • Understand the relationship between cost and revenue

• Production in the Short Run

  • Understand the concept of a production function

  • Differentiate between the different types of inputs or factors in a production function

  • Differentiate between fixed and variable inputs

  • Differentiate between production in the short run and in the long run

  • Differentiate between total and marginal product

  • Understand the concept of diminishing marginal productivity

• Costs in the Short Run

  • Understand the relationship between production and costs

  • Understand that every factor of production has a corresponding factor price

  • Analyze short-run costs in terms of total cost, fixed cost, variable cost, marginal cost, and average cost

  • Calculate average profit

  • Evaluate patterns of costs to determine potential profit

• Production in the Long Run

  • Understand how long run production differs from short run production.

• Costs in the Long Run

  • Calculate long run total cost

  • Identify economies of scale, diseconomies of scale, and constant returns to scale

  • Interpret graphs of long-run average cost curves and short-run average cost curves

  • Analyze cost and production in the long run and short run

CHAPTER 8: PERFECT COMPETITION

In this chapter, you will learn about:

• Perfect Competition and Why It Matters

  • Explain the characteristics of a perfectly competitive market

  • Discuss how perfectly competitive firms react in the short run and in the long run

• How Perfectly Competitive Firms Make Output Decisions

  • Calculate profits by comparing total revenue and total cost

  • Identify profits and losses with the average cost curve

  • Explain the shutdown point

  • Determine the price at which a firm should continue producing in the short run

• Entry and Exit Decisions in the Long Run

  • Explain how entry and exit lead to zero profits in the long run

  • Discuss the long-run adjustment process

• Efficiency in Perfectly Competitive Markets

  • Apply concepts of productive efficiency and allocative efficiency to perfectly competitive markets

  • Compare the model of perfect competition to real-world markets

CHAPTER 9: MONOPOLY

• How Monopolies form: Barriers to Entry

  • Distinguish between a natural monopoly and a legal monopoly.

  • Explain how economies of scale and the control of natural resources led to the necessary formation of legal monopolies

  • Analyze the importance of trademarks and patents in promoting innovation

  • Identify examples of predatory pricing

• How a Profit-Maximizing Monopoly Chooses Output and Price

  • Explain the perceived demand curve for a perfect competitor and a monopoly

  • Analyze a demand curve for a monopoly and determine the output that maximizes profit and revenue

  • Calculate marginal revenue and marginal cost

  • Explain allocative efficiency as it pertains to the efficiency of a monopoly

CHAPTER 10: MONOPOLISTIC COMPETITION AND OLIGOPOLY

• Monopolistic Competition

  • Explain the significance of differentiated products

  • Describe how a monopolistic competitor chooses price and quantity

  • Discuss entry, exit, and efficiency as they pertain to monopolistic competition

  • Analyze how advertising can impact monopolistic competition

• Oligopoly

  • Explain why and how oligopolies exist

  • Contrast collusion and competition

  • Interpret and analyze the prisoner’s dilemma diagram

  • Evaluate the tradeoffs of imperfect competition

CHAPTER 11: MONOPOLY AND ANTITRUST POLICY

• Corporate Mergers

  • Explain antitrust law and its significance

  • Calculate concentration ratios

  • Calculate the Herfindahl-Hirschman Index (HHI)

  • Evaluate methods of antitrust regulation

• Regulating Anticompetitive Behavior

  • Analyze restrictive practices

  • Explain tying sales, bundling, and predatory pricing

  • Evaluate a real-world situation of possible anticompetitive and restrictive practices

• Regulating Natural Monopolies

  • Evaluate the appropriate competition policy for a natural monopoly

  • Interpret a graph of regulatory choices

  • Contrast cost-plus and price cap regulation

• The Great Deregulation Experiment

  • Evaluate the effectiveness of price regulation and antitrust policy

  • Explain regulatory capture and its significance

CHAPTER 12: ENVIRONMENTAL PROTECTION AND NEGATIVE EXTERNALITIES

• The Economics of Pollution

  • Explain and give examples of positive and negative externalities

  • Identify equilibrium price and quantity

  • Evaluate how firms can contribute to market failure

• Command-and-Control Regulation

  • Explain command-and-control regulation

  • Evaluate the effectiveness of command-and-control regulation

• Market-Oriented Environmental Tools

  • Show how pollution charges impact firm decisions

  • Suggest other laws and regulations that could fall under pollution charges

  • Explain the significance of marketable permits and property rights

  • Evaluate which policies are most appropriate for various situations

• The Benefits and Costs of U.S. Environmental Laws

  • Evaluate the benefits and costs of environmental protection

  • Explain the effects of ecotourism

  • Apply marginal analysis to illustrate the marginal costs and marginal benefits of reducing pollution

• International Environmental Issues

  • Explain biodiversity

  • Analyze the partnership of high-income and low-income countries in efforts to address international externalities

• The Tradeoff between Economic Output and Environmental Protection

  • Apply the production possibility frontier to evaluate the tradeoff between economic output and the environment

  • Interpret a graphic representation of the tradeoff between economic output and environmental protection

CHAPTER 13: POSITIVE EXTERNALITIES AND PUBLIC GOODS

• Why the Private Sector Underinvests in Technologies

  • Identify the positive externalities of new technology.

  • Explain the difference between private benefits and social benefits and give examples of each.

  • Calculate and analyze rates of return

• How Governments Can Encourage Innovation

  • Explain the effects of intellectual property rights on social and private rates of return.

  • Identify three U.S. Government policies and explain how they encourage innovation

• Public Goods

  • Identify a public good using nonexcludable and non-rival as criteria

  • Explain the free rider problem

  • Identify several sources of public goods

CHAPTER 14: LABOR MARKETS AND INCOME

• The theory of labor markets

  • The Demand for Labor in Perfectly Competitive Output Markets

  • The Demand for Labor in Imperfectly Competitive Output Markets

  • What Determines the Going Market Wage Rate?

• How wages are determined in an imperfectly competitive labor market

  • Define monopsony power

  • Explain how imperfectly competitive labor markets determine wages and employment, where employers have market power

• How unions affect wages and employment

  • Explain the concept of labor unions, including membership levels and wages

  • Evaluate arguments for and against labor unions

  • Analyze reasons for the decline in U.S. union membership

• How labor market outcomes are determined under Bilateral Monopoly

  • How firms determine wages and employment when a specific labor market combines a union and a monopsony

• Theories of Employment Discrimination

  • Analyze earnings gaps based on race and gender

  • Explain the impact of discrimination in a competitive market

  • Identify U.S. public policies designed to reduce discrimination

• How Immigration affects labor market outcomes

  • 1. • Historical Patterns of Immigration

       • Economic Effects of Immigration

       • Proposals for Immigration Reform

chapter 15: poverty and economic inequality

• Drawing the Poverty Line

  • Explain economic inequality and how the poverty line is determined

  • Analyze the U.S. poverty rate over time, noting its prevalence among different groups of citizens

• The Poverty Trap

  • Explain the poverty trap, noting how government programs impact it

  • Identify potential issues in government programs that seek to reduce poverty

  • Calculate a budget constraint line that represents the poverty trap

• The Safety Net

  • Identify the antipoverty government programs that comprise the safety net

  • Explain the the safety net programs' primary goals and how these programs have changed over time

  • Discuss the complexities of these safety net programs and why they can be controversial

• Income Inequality: Measurement and Causes

  • Explain the distribution of income, and analyze the sources of income inequality in a market economy

  • Measure income distribution in quintiles

  • Calculate and graph a Lorenz curve

  • Show income inequality through demand and supply diagrams

• Government Policies to Reduce Income Inequality

  • Explain the arguments for and against government intervention in a market economy

  • Identify beneficial ways to reduce the economic inequality in a society

  • Show the tradeoff between incentives and income equality

chapter 16: information, risk, and insurance

• The Problem of Imperfect Information and Asymmetric Information

  • Analyze the impact of both imperfect information and asymmetric information

  • Evaluate the role of advertisements in creating imperfect information

  • Identify ways to reduce the risk of imperfect information

  • Explain how imperfect information can affect price, quantity, and quality

• Insurance and Imperfect Information

  • Explain how insurance works

  • Identify and evaluate various forms of government and social insurance

  • Discuss the problems caused by moral hazard and adverse selection

  • Analyze the impact of government regulation of insurance

chapter 17: financial markets

• How Businesses Raise Financial Capital

  • Describe financial capital and how it relates to profits

  • Discuss the purpose and process of borrowing, bonds, and corporate stock

  • Explain how firms choose between sources of financial capital

• How Households Supply Financial Capital

  • Show the relationship between savers, banks, and borrowers

  • Calculate bond yield

  • Contrast bonds, stocks, mutual funds, and assets

  • Explain the tradeoffs between return and risk

• How to Accumulate Personal Wealth

  • Explain the random walk theory

  • Calculate simple and compound interest

  • Evaluate how capital markets transform financial capital

chapter 18: public economy

• Voter Participation and Costs of Elections

  • Explain the significance of rational ignorance

  • Evaluate the impact of election expenses

• Special Interest Politics

  • Explain how special interest groups and lobbyists can influence campaigns and elections

  • Describe pork-barrel spending and logrolling

• Flaws in the Democratic System of Government

  • Assess the median voter theory

  • Explain the voting cycle

  • Analyze the interrelationship between markets and government

chapter 19: international trade

• Absolute and Comparative Advantage

  • Define absolute advantage, comparative advantage, and opportunity costs

  • Explain the gains of trade created when a country specializes

• What Happens When a Country Has an Absolute Advantage in All Goods

  • Show the relationship between production costs and comparative advantage

  • Identify situations of mutually beneficial trade

  • Identify trade benefits by considering opportunity costs

• Intra-industry Trade between Similar Economies

  • Identify at least two advantages of intra-industry trading

  • Explain the relationship between economies of scale and intra-industry trade

• The Benefits of Reducing Barriers to International Trade

  • Explain tariffs as barriers to trade

  • Identify at least two benefits of reducing barriers to international trade

chapter 20: globalization and protectionism

• Protectionism: An Indirect Subsidy from Consumers to Producers

  • Explain protectionism and its three main forms

  • Analyze protectionism through concepts of demand and supply, noting its effects on equilibrium

  • Calculate the effects of trade barriers

• International Trade and Its Effects on Jobs, Wages, and Working Conditions

  • Discuss how international trade influences the job market

  • Analyze the opportunity cost of protectionism

  • Explain how international trade impacts wages, labor standards, and working conditions

• Arguments in Support of Restricting Imports

  • Explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument

  • Explain dumping and race to the bottom

  • Evaluate the significance of countries’ perceptions on the benefits of growing trade

• How Trade Policy Is Enacted: Globally, Regionally, and Nationally

  • Explain the origin and role of the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT)

  • Discuss the significance and provide examples of regional trading agreements

  • Analyze trade policy at the national level

  • Evaluate long-term trends in barriers to trade

• The Tradeoffs of Trade Policy

  • Asses the complexity of international trade

  • Discuss why a market-oriented economy is so affected by international trade

  • Explain disruptive market change