Review
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Course Outline
Microeconomics
Firms and
How Markets
Introduction Organization of
Work Additional
industries
Topics
What is Demand and Cost of
Economics? supply Production
Matching Model
Gains from Perfect
Elasticity
Trade Competition
Reflection
Efficiency and
Equity Monopoly
Government
Policies in Oligopoly
Markets
International
Trade
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Topic Intended Learning Outcome--Reflection
13.1 Comment on if “invisible hand” justifies selfishness and if
the common economics assumption justifies selfishness.
13.2 Name a few areas where economic consideration is less
important.
13.3 Give examples of some cases where market value is not
the same as value.
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Matching Model TILO
12.1 Find M-optimal and W-optimal stable
matchings in marriage market and understand
gender discrimination in M-proposing societies.
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Oligopoly
11.1 Construct Prisoners’ Dilemma game and give 3
examples of prisoners’ Dilemma game in real life.
11.2 Define and identify dominant strategy
11.3 Define and identify/calculate best reply and Nash
equilibrium, including but not limited to
Calculate Nash equilibrium/equilibria of any game represented by a
table.
Calculate Nash equilibrium in Cournot, Bertrand, and Hotelling Model
and apply it to explain economic phenomenon.
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Monopoly
10.1 Explain how a single-price monopoly determines its
output and price.
10.2 Compare the performance and efficiency of single-
price monopoly and competition.
10.3 Explain how price discrimination increases profit and
three types of price discrimination.
Perfect Price discrimination
Direct segment price discrimination
Indirect segment price discrimination
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Perfect Competition
9.1 Define perfect competition.
9.2 Explain how a firm makes its output decision and why it sometimes
shuts down temporarily and lays off its workers.
9.3 Explain why sunk cost is not relevant in decision-making
9.4 Explain how price and output are determined in a perfect
competitive market.
9.5 Explain why firms enter and leave a competitive market and the
consequences of entry and exit.
9.6 Explain a firm’s long-run decision and long-run market adjustment.
9.7 Explain why perfect competition is efficient.
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Cost of Production and Market Structure
8.1 Distinguish and calculate economic profit and accounting profit.
8.2 Explain and calculate Total Product, Marginal Product, and
Diminishing MPL
8.3 Explain the relationship between a firm’s output and costs in the
short run
8.4 Derive and explain a firm’s short-run cost curves
8.5 Distinguish between the short run and the long run
8.6 Derive and explain a firm’s long-run average cost curve
8.7 Explain Economics of Scale and intuitive factor behind Economics
of Scale
8.8 Define Minimum Efficient Scale, Network/Cross-side Network
Externality and use those concepts to explain market structure.
8.9 Calculate C4 and HHI
8.10 Define and give examples of four types of markets
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International Trade
7.1 Explain how markets work with international trade
7.2 Identify the gains from international trade and its
winners and losers
7.3 Explain the effects of international trade barriers
7.4 Explain and evaluate arguments used to justify
restricting international trade
7.5 Explain the true reasons for restricting international
trade
Government Policies in Markets
6.1 Explain the possible impacts of a price ceiling, such as
rent ceiling
6.2 Explain the possible impacts of a price floor, such
minimum wage
6.3 Explain tax incidence: the difference between paying
and bearing and the relationship with elasticity of demand
and supply.
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Efficiency and Fairness
5.1 Be able to answer the following questions:
What is efficiency?
Is the competitive market efficient and why?
What is fair?
Is the competitive market fair and in what sense?
5.2 Define consumer surplus and producer surplus.
5.3 Understand the principle of letting competitive markets
to allocate resource
5.4 Use demand and supply model to identify areas that
may need government intervention.
5.5 Compare the two types of fairness.
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Elasticities
4.1 Define, calculate, and explain the factors that influence
the price elasticity of demand
4.2 Distinguish elastic/inelastic demand
4.3 Explain the relationship between changes in
expenditure and demand elasticity
4.4 Define and calculate the cross elasticity of demand and
the income elasticity of demand
4.5 Define, calculate, and explain the factors that influence
the elasticity of supply
4.6 Use elasticity concepts to explain relevant economic
phenomena.
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Demand and Supply-1
3.1 Explain the law of demand and the law of supply.
3.2 Explain the consumer’s optimal decision rule.
3.3 Explain the relationship between the demand
curve and the marginal benefit (measured by
willingness to pay) curve.
3.4 Identify the factors influence demand/supply; use
graphs to represents how change in certain factor
change the demand/supply curve; distinguish
changes in quantity demanded/supplied and
changes in demand/supply.
3.5 Distinguish Normal goods and Inferior goods.
3.6 Define and identify substitutes and complements.
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Demand and Supply-2
3.7 Explain and apply the optimal decision rule of a
seller in a perfect competitive market; explain the
relationship between the supply curve and marginal
cost curve.
3.8 Aggregate individual demand/supply curves to get
market demand/supply curves.
3.9 Explain how prices are determined in competitive
markets; calculate market equilibrium price and
quantity for any given demand and supply curves;
explain how market reaches equilibrium.
3.10 Use graphs to predict changes in equilibrium
when some factors influence demand and/or supply
change.
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Gains from Trade
2.1 Define the production possibilities frontier and calculate
opportunity cost.
2.2 Explain why PPF usually bows outwardly.
2.3 Distinguish between production possibilities and
preferences, distinguish between production efficiency
and allocation efficiency.
2.4 Define and Distinguish absolute and comparative
advantages, explain how specialization and trade
expand our production possibilities.
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Introduction
After this lecture, you’ll be able to:
1.1 Define Economics
1.2 Distinguish between microeconomics and
macroeconomics
1.3 Distinguish between normative and positive
questions/statements
1.4 Explain Economic methodology in your own
words
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Final Exam
3 hours
Close-book, close-notes, a simple calculator
allowed
Cumulative, but around 80% on content not
covered in midterm
20 MC: 40%; 5 short questions: 30%; 2 long
questions: 30%
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Reach me
[email protected]
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