MCCCD Official Course Competencies:

ECN212  2007 Spring – 2011 Summer II

Microeconomic Principles

1.

Define the major concepts in economics, and describe and analyze major economic systems. (I, II)

2.

Describe the determinants of supply and demand and their effect on equilibrium price. (III)

3.

Describe utility theory and the underpinnings of demand. (III, V)

4.

Describe the relation of price elasticity to revenue. (IV)

5.

Define market structures and business organization and provide examples. (VI)

6.

Define the production function, marginal and average product, and their relationship to costs. (VI)

7.

Describe the relation between short-run cost and supply. (VI)

8.

Describe the determinants of scale economics. (VI)

9.

Describe the relation between long-run cost and supply. (VI)

10.

Describe the nature of supply and demand in competitive markets. (VII)

11.

Describe monopoly behavior and why it has resulted in regulation and antitrust legislation. (VII, VIII)

12.

Describe other forms of imperfect competition including oligopoly, monopolistic competition, and price discrimination. (VII)

13.

Compare perfectly and imperfectly competitive industries from the buyer's and seller's perspectives. (VII)

14.

Describe the unique features of resource markets. (IX)

MCCCD Official Course Outline:

ECN212  2007 Spring – 2011 Summer II

Microeconomic Principles

I. Major Concepts in Economics

A. Scarcity and choice

B. Macro vs. microeconomics

C. Positive vs. normative economics

D. Factors of production

II. Analysis of Economic Systems

A. Production possibility frontier

B. The economic problem

C. Specialization, exchange, and comparative advantage

D. Property rights

III. Introduction to Supply and Demand

A. Supply

1. The supply curve

2. Factors that cause supply curves to shift

B. Demand

1. The law of demand

2. Factors that cause demand curves to shift

C. Equilibrium of demand and supply

1. What the market accomplishes

2. Effects of price ceilings

D. Changes in equilibrium price

IV. Demand and Consumer Choice

A. Price elasticity of demand

B. Price elasticity and total revenue

C. Price elasticity and marginal revenue

D. Income elasticity of demand

E. Cross-price elasticity

V. Utility and Rational Consumer Choice

A. Marginal utility

B. Diminishing marginal utility

C. Paradox of value

D. Consumer equilibrium

VI. Cost and Supply

A. Market structures and business organization

1. Definitions

2. Examples

B. Social and opportunity cost

C. External and internal cost

D. Economic profit; explicit and implicit costs

E. The short-run production function

1. Marginal product

2. Average product

3. Relationship to costs

F. Short-run cost structures

1. Fixed costs

2. Variable costs and diminishing returns

3. Marginal cost and short-run competitive supply

4. Short-run profit-maximizing levels of output

G. Economies and diseconomies of scale

1. Determinants of scale economies

2. Scale economies and market structures

3. Recent trends in scale economies

H. Long-run supply

1. Constant cost

2. Increasing cost

3. Decreasing cost

4. Technological change and prospects for the future

VII. Competition: Perfect and Imperfect

A. Perfect competition and the optimal allocation of resources

B. Monopoly power and the misallocation of resources

C. Motives for businesses growing large

D. Industrial concentration

E. Repercussions of imperfect competition

1. Price discrimination

2. Predatory practices

3. Mergers

F. Modes of behavior among oligopolists

1. The kinked-demand curve

2. Parallel action

3. Cartels

G. Monopolistic competition

VIII. Government Regulation of Business

IX. Resource Markets and Pricing

A. Marginal productivity analysis

1. The case of labor

2. Other productive resources

B. Wage-rate determination

1. Average wage in the economy

2. Occupational wage differentials

3. Union strategies

4. Economic impact of unions