|
MICROECONOMICS OBJECTIVES - (Spring Semester)
The purpose of an AF
course in Microeconomics is to give students a thorough understanding of the principles of economics that apply to the decisions
of individuals--both consumers and producers--within the larger economic system. It places primary emphasis on the nature
and functions of product markets, and includes the study of factor markets and the role of government in promoting greater
efficiency and equity in the economy.
This portion
of the AF Economics course will be divided into five units:
UNIT I: SUPPLY AND DEMAND: HOW MARKETS WORK
| The laws of Supply and Demand are
the absolute fundamentals of economics; as President John F. Kennedy once said: "Teach a parrot to say 'supply and demand'
and you'll have an economist." Supply and Demand are tools for understanding a wide variety of specific issues as well as
the operation of the entire economic system. In this unit, we will learn that Supply and Demand curves are models for human
behavior, and we will learn to analyze the determinants of Supply and Demand and the ways in which changes in these determinants
affect Supply and Demand curves. Emphasis will be placed on the process by which equilibrium price and quantity are determined
and the impact of government policies such as price floors, taxes, tariffs and quotas. In particular it is important to be
able to make the distinction between movements along the curves and shifts in the curves themselves. |
|
OBJECTIVES
1. Describe the behavior of buyers
and sellers in a competitive marketplace
2. List and explain the determinants of Demand
3. List and explain the determinants
of Supply
4. Define and distinguish between the Income and Substitution effects
5. Define Diminishing Marginal Utility
and explain how the Law of Diminishing Marginal Utility affects a downward sloping Demand curve
6.Draw a graph of a Supply
and Demand schedule from data
7. Define Equilibrium
8. Determine what Equilibrium price and quantity will be when given
the Demand and Supply data for a good
9. Differentiate between a "change in demand" and a "change in quantity demanded"
10.
Differentiate between a "change in supply" and a "change in quantity supplied"
11. Analyze factors and situations that
cause Supply and Demand curves to shift
12. Predict the effects of changes in the prices and quantities of Substitute and
Complementary goods on the equilibrium price and quantity of a good
13. Explain shifts in the Supply and Demand curves
based on changes in Supply and Demand
14. Define Price Elasticity of Demand
15. Distinguish between Elastic and Inelastic
Demand
16. Explain the factors that tend to make Demand Elastic or Inelastic
17. Determine the Elasticity of a good
at different prices based on changes in Total Revenue
18. Explain the factors that make a good Elastic or Inelastic
19.
Define and distinguish between a Normal and an Inferior good
20. Define Price Ceilings and Price Floors
21. Graph Price
ceilings and Price Floors
22. Analyze the effects of Price Ceilings and Price Floors on a competitive market
23. Define
and describe the concepts of Surplus and Shortage and how they relate to Price Ceilings and Price Floors
24. Explain how
markets allocate resources |
UNIT II: CONSUMER CHOICE AND UTILITY
This unit devotes attention to behavior of consumers within the goods market. We focus
on the rational decision making process of consumers and how each derives satisfaction from the choices and purchases they
make. The concept of marginal analysis is reintroduced along with consumer surplus graphs and utility for individual
demand.
OBJECTIVES:
1.
Understand the economics of consumer behavior: how consumers choose to spend their income on goods
and services.
2. Explain why consumers make choice by
maximizing utility, a measure of satisfaction from consumption.
3. Explain why the principle of diminishing marginal utility applies to the
consumption of most goods and services.
4. Understand how to use marginal analysis to find the optimal consumption bundle.
5. Understand how choices by individual consumers give rise to the market demand
curve.
6. Define both the income and substitution effects.
7. Define Diminishing Marginal Utility and explain how the Law of Diminishing
Marginal Utility affects a downward sloping Demand curve
8. Define consumer surplus and be able to represent
on a graph.
UNIT III: THEORY OF THE FIRM
| The Theory of the Firm is the heart
of a Microeconomics course. This material will be difficult because it is abstract, and it is important not to get bogged
down in details and miss the major theoretical conclusions in this unit. We will learn to differentiate between short-run
and long-run equilibria for both a profit-maximizing firm and for an industry, and to understand the relationships among price,
marginal revenue, average revenue, marginal cost, average cost and profit. In this unit, we apply these concepts to
firms under perfect competition. |
|
OBJECTIVES
1. Distinguish between
a fixed cost and a variable cost
2. Define and Graph total fixed cost, total variable cost, average fixed cost, average
variable cost, average total cost and marginal cost
3. Define and plot total revenue, average revenue, marginal revenue
and price
4. Define and identify profit, loss, the break-even point and the shutdown point
5. Distinguish between normal
profit and economic profit
6. Distinguish between productive and allocative efficiency
7. Distinguish between the short-run
and the long-run
8. Distinguish between an implicit and an explicit cost
9. State the Law of Diminishing Returns
10.
Explain the Long-run average cost curve
11. Explain the profit-maximizing rule
12. List the characteristics
of a Perfectly Competitive. Monopolistically Competitive, Oligopolistic and Monopolistic market 13. Graph a Perfectly
Competitive, Monopolistically Competitive, Oligopolistic and Monopolistic market 14. Distinguish between a Perfectly Competitive, Monopolistically Competitive,
Oligopolistic and Monopolistic market 15. Define the Concentration ratio 16. Describe the effects of different markets on the price of a product, the quantity of a product, the allocation
of society's resources, the distribution of income and the rate of technological progress 17. Distinguish between homogenous and differentiated Oligopoly 18. Define collusion and list the advantages
and disadvantages of collusion 19. Describe the Prisoner's Dilemma 20. Describe different types of non-price competition 21. Explain the theory of the regulated market place 22. Identify the socially optimal and fair return price for a regulated
monopoly
|
UNIT V: MARKET FAILURE & THE PUBLIC SECTOR
| It is important for students to
understand the arguments for and against government intervention in otherwise competitive markets. In this unit, we will examine
market failures due to negative and positive externalities, and analyze government microeconomic policies such as subsidies,
taxes and the provision of public goods. Government policies will be evaluated against a criteria of efficiency and equity. | OBJECTIVES
1. Define public goods
2. Describe
the characteristics of a public good
3. Develop a rationale for determining which goods should be produced by the private
sector and which goods should be produced by the public sector
4. Develop a criteria for evaluating the effectiveness of
government programs
5. Define and give examples of externalities and third-party costs
6. Explain overproduction and
underproduction
7. Define and differentiate between the progressive, regressive, proportional, ability-to-pay and benefits-received
theories of taxation
8. Develop a criteria for evaluating the effectiveness and fairness of a tax |
JA TITAN SIMULATION GAME
UNIT VI: PERSONAL FINANCE
In this Unit, students will be exposed to the basics of savings and investing. The unit will
cover such real life concepts as compound interest, stocks, bonds mutual funds and government protected savings vehicles.
Students will be taught the importance of saving money as well as looking into how life insurance, mortgages and income
taxes will affect then in the future.
OBJECTIVES:
1. Understand the difference between saving and investing.
2. Identify correct techniques for savings.
3. List and understand the different saving and investing options available and the pros and
cons for each.
4. Define compound interest.
5. Be able to complete a basic 1040EZ income tax form.
6. Understand how a mortgage works.
7. Learn the advantages and disadvantages of various tpes of life insurance policies.
|
