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Description Instructor Outline
Clark Ross

Economics is the study of how a society addresses the relative scarcity of goods and services within its country.

Associated with scarcity are four fundamental questions:

1. What goods and services to produce?
2. How to produce these goods and services (which combination of inputs, such as labor, capital and land—for the given technology)?
3. The division of current income or output between current consumption and savings for enhanced future consumption, or economic growth.
4. The distribution of those goods and services produced among the population of the country. What degree of inequality will result and what degree of inequality is tolerable?

These questions can be studied from the perspective of macroeconomics (the study of the aggregate or national economy—which would include unemployment and inflation) or microeconomics (the study of the behavior of individual economic agents, like firms, consumers, or workers—detailed below).

This course will concern introductory microeconomics. The organization of the courses follows:
  • An introduction to economics and the four economic questions.
  • An introduction to and explanation of how a capitalist competitive market system addresses the four economic questions.
  • The important concept of elasticity or responsiveness of an important economic variable.
  • The consumer’s decision of which goods to purchase, given that consumer income is limited, and goods have unit prices to purchase them.
  • The study of the firm and the costs for the firm to produce goods and services both in the short run and in the long run.
  • The four market structures: perfect competition, monopoly, monopolistic competition, and oligopoly.
  • The results of perfectly competitive market, both in the short run and in the long run.
  • The study of monopoly, a single firm, detailed, concentrating on the classic monopoly, the natural monopoly, and price discrimination by monopoly firms.
  • Perfect competition and monopoly related to monopolistic competition in different market structure.
  • Oligopoly is a market with a few firms, characterized by interdependence among the firms. To show this interdependence we will introduce the concept and technique of game theory.
  • How the profit-maximizing firm in labor market assesses and compares the marginal revenue product or contribution of labor to the marginal cost hiring labor.
  • Market failures: monopoly, externalities (both positive and negative), and public goods. We will discuss the type of government intervention that can correct market failures.
  • The key concepts of comparative advantage, specialization, trade (exports for imports) and the consumer gains from international trade.
Teaching Methods:

Each of the topics above will have lectures by Professor Ross with graphs and tables. Also, there will be questions for the students to check their knowledge of the lecture given.

Preparation for testing and Subsequent Work:

Following this course, a student should be prepared to take the Advanced Placement Test in microeconomics or the International Baccalaureate Exam in Microeconomics. Also, the student who has mastered these concepts will be prepared to study more advanced topics in microeconomics at the university level. The courses can include intermediate microeconomic theory, international trade, industrial organization and business competition, environmental economics, urban economics, labor economics, and economic development.

Welcome to the study of microeconomics, with all its challenges and benefits!

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