MCCCD Official Course Competencies:

ECN100  1995 Fall – 2006 Fall

Economics in American Society

1.

Define common terminology used in economics. (I)

2.

Describe basic principles of major economic systems. (II)

3.

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

4.

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

5.

Define and exemplify market structures and business organizations (I)

6.

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

7.

Describe the relationship between short-run cost and supply. (V)

8.

Describe the determinants of scale economics. (V)

9.

Describe the relationship between long-run cost and supply. (V)

10.

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

11.

Describe monopoly behavior and related regulation antitrust legislation. (VII)

12.

Describe various forms of imperfect competition, including oligopoly, monopolistic competition, and price discrimination. (VI)

13.

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

14.

Describe the unique features of factor markets. (VIII)

15.

Identify measures of the National Economy, an describe how they are compiled and analyzed. (IX)

16.

Describe the Keynesian Income/Expenditure Model. (X)

17.

Describe the aggregate demand and supply curves, and causes of short and long run equilibrium. (XI)

18.

Identify major determinants of fiscal policy, and describe their impact on government decisions. (XII)

19.

Describe the relationship between money and prices. (XIII)

20.

Describe the functions of commercial banking and the federal reserve system. (XIV)

21.

Describe U.S. monetary policy, and identify problems that occur as a result of that policy. (XV)

22.

Describe the causes of inflation and unemployment, and identify their effects on the economy. (XV)

23.

Describe stabilization policy and the implications of the Phillips Curve. (XVII)

24.

Describe the structure and trend of the U.S. Balance of Trade. (XVIII)

MCCCD Official Course Outline:

ECN100  1995 Fall – 2006 Fall

Economics in American Society

I. Economics: Terminology and Concepts

A. Scarcity and choice

B. Marco vs. microeconomics

C. Positive vs. normative economics

D. Factors of production

II. 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. Demand

1. The law of demand

2. Factors that cause supply curves to shift

B. Supply

1. The supply curve

2. Factors that cause supply 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. Gross price elasticity

V. Cost and Supply

A. Market structures

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 s structures

3. Recent trends in scale economies

H. Long-run supply

1. Constant cost

2. Increasing cost

3. Decreasing cost

4. Technological change an prospects for the future

VI. Competition: Perfect and Imperfect

A. Perfect competition and the optimal allocation of resources

B. Monopoly power and the misallocation of resources

C. Motives for business to expand

D. Industrial concentration

E. The 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

VII. Government Regulation of Business

VIII. Pricing Productive Resources

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

IX. Measuring the National Economy

A. Dynamic measures of the economy

1. Unemployment

2. Inflation

3. Business cycles

B. The circular flow of economic activity

C. National income accounting

1. Gross national product/gross domestic product

2. Real gross national product

3. National income

4. Leakages equal injections

5. Balance of trade

X. The Keynesian Income/Expenditure Model

A. The classical model

B. The income/expenditure approach

1. Consumption, income, and savings

2. The marginal propensities

3. Other factors that affect consumption

C. Equilibrium income and expenditures

D. Multipliers

E. The theory of investment

XI. Aggregate Demand and Aggregate Supply

A. Aggregate demand curve

B. Aggregate supply

C. Short-run equilibrium

1. Supply shocks

2. Shifts in aggregate demand

3. Inflationary and deflationary gaps

D. Long-run equilibrium

XII. Fiscal Policy

A. Automatic stabilizers

B. Taxation

C. Discretionary fiscal policy

D. Link between government and trade deficits

E. Effectiveness of fiscal policy

1. Multipliers and crowding out

2. Lags in fiscal policy

F. Line-item veto and the balanced budget amendment

XIII. Money and Prices

A. The functions of money

B. The supply of money

C. The relationship between money and prices

1. The classical quantity theory of money

2. The velocity of circulation

3. The equation of exchange

4. Changes in money supply and prices

XIV. Commercial Banking and the Federal Reserve

A. Commercial banking

B. How banks create money

1. Monetization of debt

2. The deposit multiplier

3. Money expansion in the real world: the money multiplier

C. International banking

D. The federal reserve

1. History and function

2. Present role

E. The FDIC and FSLIC

XV. Monetary Policy

A. Policy tools

B. Keynesian monetary policy

C. Money growth and interest rate targeting

D. Problems of monetary policy

1. Lags in monetary policy

2. Problems of controlling the money supply

3. Knowing the money multiplier

E. Independence of the Fed

XVI. Inflation and Unemployment

A. Inflation

1. Demand-side and supply-side inflation

2. Monetary and interest rates

3. Inflation and interest rates

4. Inflation expectations

B. Changes in the natural rate of unemployment

C. The Philips Curve

1. The breakdown of the Phillips Curve

2. The short-run and long-run Phillips Curves

XVII. Stabilization Policy

A. Implications of the Phillips Curves

B. Activism vs. nonactivism

C. New policy directions

XVIII. International Trade

A. The evolution of the international monetary system

1. Breakdown of the gold standard

2. The Bretton Woods system

3. The breakdown of the Bretton Woods system

4. The present international monetary system

B. International trade agreements and Gatt