As an Introduction to the Principles of Microeconomics, this micro course begins by defining some of the major ideas lying at the heart of economics. What, for example, is the economic way of thinking? What do economists mean when they throw around terms like market structure and the invisible hand?
We then address the driving principle behind microeconomics: the idea that individuals and firms (economic agents) make rational choices based on self-interest. You will also be introduced to a number of economic models, the assumptions and constraints associated with each, and the ways they help us better understand real-life situations.
We will then turn our attention to the ceteris paribus assumption: the assumption that all variables – with the exception of those in explicit consideration – will remain constant. You will then examine the supply and demand models and the resulting market equilibrium that occurs where the supply curve and the demand curve intersect, the causes of movements along the curve, and the set of factors that cause the curves to shift, affecting both price and quantity, before discussing the meaning and significance of elasticity.
Finally, we will take a look at what happens when a market fails to produce a reasonable equilibrium, and evaluate various ways in which the government can address these failures and begin to understand the intricate relationship between government and economics.