Micro-economics
1. Introduction to Micro-economics
Learning Outcomes:
q Distinguish between macroeconomics and microeconomics
q Explain the economic problem of scarcity
q Understand the concept of opportunity cost
q Explain the economic problem using a production possibility frontier
2. A closer look at the economic problem of scarcity
Learning Outcomes:
Illustrate using a production possibility curve, how a better production technique, or
increased resources affects.
Understand the three central economic questions
3. Circular Flow of income and spending
q Understand the major role players in the economy
q Describe the flow of income using the circular flow model
4. Demand and Supply
Learning Outcomes:
q Graphically illustrate how the changes in either demand or supply or simultaneous changes in demand and supply will affect the equilibrium price and equilibrium quantity in the market
q Graphically illustrate the interaction between related markets
q Show what happens if the government intervenes in the price mechanism by setting maximum and minimum prices
4. Demand, Supply and prices
Learning Outcomes:
q Draw and read simple demand and supply graphs
q Explain the difference between change in demand or supplied and change in quantity demanded or supplied
q Distinguish between movement and shifts along a demand and supply curve
q Identify the determinants of individual demand and supply and market demand and supply
5. Supply and demand in action
Learning Outcomes:
q Graphically illustrate how the changes in either demand or supply or simultaneous changes in demand and supply will affect the equilibrium price and equilibrium quantity in the market
q Graphically illustrate the interaction between related markets
q Show what happens if the government intervenes in the price mechanism by setting maximum and minimum prices
6. Elasticity
Learning Outcomes:
q Define the concept of elasticity
q Explain the meaning of specific elasticity (say ep=1.5)
q Understand the link between price elasticity and total revenue from sales
q Explain the determinants of price elasticity of demand
q Define and explain the concept of income elasticity of demand
7. Theory of production and cost
Learning Outcomes:
q Understand the different types of firms and the goals of the firm
q Distinguish between short run and long run
q Distinguish between fixed and variable inputs
q Explain the law of diminishing returns
q Draw the total average and marginal product cost curves
q Explain the relationship between production and cost in the short run
8. Perfect competition
Learning Outcomes:
q Define perfect competition
q Understand the conditions necessary for perfect competition to exist
q Explain the demand curve of a firm operating under perfect market conditions
q Determine the short run equilibrium of a firm under perfect competition
q Understand why profits are only maximized along the rising part of the marginal cost curve
q Distinguish and graphically illustrate whether a firm is making an economic profit, normal profit or an economic loss
q Explain the supply curve of the firm and market supply curve
q Understand the long run equilibrium position of the firm under perfect competition
9. Imperfect competition
Learning Outcomes:
q Understand the differences and similarities between the different market structures
q Explain the equilibrium position of each market under imperfect competition i.e. monopoly, monopolistic competition, and oligopoly
q Compare the above to a firm under perfect competition
Glossary
want – a need backed by the willingness to sacrifice resources to satisfy it (NCS, 2004)
Bibliography
National Curriculum Statement (2004) Department of Education.
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