Course Outline--Principles of Economics
Philip Leatherwood, Senior Lecturer of Economics
Kazakh Institute of Management, Economics, and Forecasting
Introduction
--How to approach the study of economics.I Foundations of Economics
Basic Definitions
Fundamental Questions
Utility
Profit
Welfare maximization
Rational economic behavior
Positive and normative economics
Free and economic goods
Scarcity and choice
Opportunity cost
Factors of production
Production possibilities (graph)
Methods of resource allocation
Degrees of government involvement
II Resource Allocation in the Market
Demand curves
Ceteris Parabis
Law of demand
Shifts in demand
Supply curves
Law of supply
Shifts in supply
Market price and quantity
Graphical analysis of
Interaction of supply and demand
Equilibrium price and quantity
Changes in equilibrium
Price Controls
Price ceilings
Price floors
Rationing
Subsidies
Parallel markets
Minimum wages
III Market Failure and Government Response
Market Failures
Externalities
Tragedy of the Commons
Public goods
Merit goods
Income inequality
Natural Monopoly
Non-market Responses
Legislation
Direct provision
Market based responses
Taxation
Subsidies
Tradeable permits
Property rights
IV Centrally planned economies
Problems of transition to market economy
Surpluses and shortages
Parallel/black markets
Producer sovereignty
Targets and planning
Isolation
V Elasticity
Price elasticity of demand
Revenue test
Cross price elasticity
Income elasticity of demand
Price elasticity of supply
Elasticity and tax incidence
Elasticity and tax revenues
VI Aims and objectives of Firms
Measuring Total Profit
Economic and normal profit
Market Power
Pure Competition
Consumer sovereignty
Product differentiation
Monopolistic competition
Oligopoly and Kinked Demand
Monopoly
VII Economic efficiency
Productive and allocative
Short run and long run cost
curves
Diminishing returns
Increasing costs
Returns to scale
Profit maximization
Graphical illustration for pure competition
Marginal and Average Costs, Revenues, Profits
Long run stability at minimum avg. cost