Course Syllabus

Required Textbooks

Open Education Resource Material provided by the instructor

Additional Materials/Resources

Provided by the Instructor

Grading Criteria

90.0 -100 A
80.0-89.9 B
70.0-79.9 C
60.0-69.9 D
Below 60 F

Grading Scale

Assessments

Exams 76%
Sapling Assignments 20%
Weekly Discussion Assignments 4%

Section

Z01

Term

Fall

Course Outline

Module 1: The Supply and Demand Framework

In this module you will use the supply and demand model to analyze the effect of various events on equilibrium prices and
quantities. You will also learn to calculate elasticities and use them to identify the effects of taxes and subsidies.

By the end of this module, you will be able to:
1. Use the supply and demand model to identify the equilibrium price and quantity of a good on a graph, and explain how
various events shift supply and demand curves and thereby change equilibrium prices and quantities.
2. Calculate demand and supply elasticities, and explain their significance for the relationship between price and total
revenue.
3. Use supply and demand analysis to identify and calculate the deadweight loss caused by a tax or subsidy.
4. Explain that the burden of a tax does not depend on who writes the check but on the relative elasticities of demand and
supply.

Module 2: The Roles That Free Market Prices Serve
In this module you will learn how prices connect markets by providing both information and incentives, and how price
ceilings and floors prevent this from occurring.
By the end of this module, you will be able to:

1. Describe the vital role that free market prices serve in providing both information and incentives to consumers and
producers, and in connecting markets through time and space.

2. Explain why price ceilings cause shortages, reductions in product quality, wasteful lineups and other search costs, and
lost gains from trade.
3. Explain why price floors cause surpluses, lost gains from trade, and wasteful increases in product quality.

Module 3: Evaluating Efficiency
In this module the welfare effects of international trade, trade restrictions, externalities, and competitive profit maximization
are evaluated.
By the end of this module, you will be able to:

1. Use the model to explain the benefits of international trade and identify who wins and who loses when governments
restrict trade—such as with tariffs and quotas.
2. Describe situations in which the efficient quantity will not be traded because the market price does not account for
external costs or benefits.
3. Use cost and revenue concepts and curves to identify the profit maximizing solution for a competitive firm, and the
conditions which will lead to entry into or exit from a competitive market.

Module 4: Competitive Versus Monopoly Markets
In this module you will learn how the competitive process minimizes production costs and maximizes consumer welfare, and
the ways in which monopoly prevents this beneficial outcome.
By the end of this module, you will be able to:

1. Describe how the competitive process leads to the minimization of total industry production costs and the elimination of
both above-normal profits and losses.
2. Use the model to show that with no central commander, a competitive market organizes production so that total output
is produced at minimum costs and maximizes consumer welfare.
3. Use marginal revenue and cost curves to identify the profit maximizing price and quantity for a monopolist, and the
resulting deadweight loss.
4. Explain the sources of market power (barriers to entry).
5. Describe how problems of economic development are addressed in a market economy.

Module 5: Price Discrimination and Cartels
In this module you will learn about two ways firms sometimes can increase their profits: price discrimination (legal), and
cartelization (illegal)
By the end of this module, you will be able to:

1. Explain how firms can use price discrimination to increase their profits by setting higher prices in less elastic markets.
2. Describe how arbitrage makes price discrimination difficult.
3. Show how cartels attempt to increase profits by limiting production to the quantity a monopolist would produce.
4. Explain why cartels are unstable and often break down because of cheating, market entry, and government prosecution.

Module 6: Monopolistic Competition and Labor Markets
In this module you will learn the characteristics of a monopolistically competitive market, and use the supply and demand
model to analyze labor markets.

By the end of this module, you will be able to:

1. Explain the characteristics of a monopolistically competitive market, as well as the outcomes of such a market in terms of
profit maximization, pricing, profitability, and efficiency.
2. Identify the fundamental reasons wages are higher in some countries than others.
3. Use the concept of compensating differentials to explain why economic growth leads to higher levels of health and
safety standards in workplaces.
4. Describe the difference between public goods and private goods.
5. Analyze labor market factors which impact the functional distribution of income using the supply and demand model.

Module 7: Consumer Theory
In this module you will learn to use a simple model of how consumers allocate their income among competing goods

By the end of this module, you will be able to:
1. Explain the optimal consumption rule and how it relates to the demand curve.