Microeconomics

Why every choice has a cost, how economists separate facts from values, and how societies decide what to make and who gets it.

1. Scarcity and the Factors of Production
2. Opportunity Cost
3. Positive and Normative Statements
4. Economic Systems
5. Budget Constraints

The production possibilities curve, opportunity cost in production, growth, and why specializing and trading can make both sides better off.

1. The Production Possibilities Curve
2. Opportunity Cost Along the PPC
3. Growth and Shifts of the PPC
4. Absolute and Comparative Advantage
5. Specialization and the Terms of Trade

Decide one unit at a time: compare marginal benefit with marginal cost, ignore sunk costs, and spend where the next dollar does the most good.

1. Marginal Benefit, Marginal Cost and Sunk Costs
2. Total and Marginal Utility
3. Marginal Utility per Dollar

Demand and supply schedules, what shifts each curve, market equilibrium, and how prices and quantities respond to change.

1. The Law of Demand
2. Demand Equations Both Ways
3. Change in Demand vs Change in Quantity Demanded
4. What Shifts Demand
5. Substitutes and Complements
6. The Law of Supply
7. What Shifts Supply
8. Market Equilibrium
9. Shortages and Surpluses
10. When One Curve Shifts
11. When Both Curves Shift

How strongly quantities respond to price and income, what makes demand elastic, and what elasticity means for a seller's revenue.

1. Price Elasticity of Demand
2. Elastic, Inelastic and What Decides It
3. Elasticity and Total Revenue
4. Price Elasticity of Supply
5. Income and Cross-Price Elasticity

Consumer and producer surplus, deadweight loss, and what price controls, taxes, subsidies and trade barriers do to a market.

1. Consumer and Producer Surplus
2. Total Surplus and Deadweight Loss
3. Price Ceilings and Price Floors
4. Per-Unit Taxes
5. Who Really Pays a Tax
6. Per-Unit Subsidies
7. Trade at the World Price
8. Tariffs and Import Quotas

Economic profit, the short-run production function, cost curves and how they relate, and economies of scale in the long run.

1. Accounting and Economic Profit
2. Short-Run Production
3. Short-Run Costs
4. How Marginal and Average Costs Relate
5. What Shifts the Cost Curves
6. Economies and Diseconomies of Scale

Price-taking firms, the MR = MC rule, profit and loss, when to shut down, and long-run equilibrium with entry and exit.

1. Perfect Competition and Price Takers
2. Profit-Maximizing Output: MR = MC
3. Profit and Loss on the Graph
4. The Shutdown Rule
5. Entry, Exit and the Long Run
6. Allocative and Productive Efficiency

Monopoly, natural monopoly and its regulation, price discrimination, monopolistic competition, and oligopolies as strategic games.

1. Monopoly and Barriers to Entry
2. Why Marginal Revenue Is Below Price
3. The Monopolist's Price and Output
4. Monopoly and Deadweight Loss
5. Regulating a Natural Monopoly
6. Price Discrimination
7. Monopolistic Competition
8. Payoff Matrices and Dominant Strategies
9. Nash Equilibrium and the Prisoner's Dilemma

Derived demand for labor, the hiring rule MRP = MRC, shifts in labor markets, the least-cost mix of inputs, and monopsony.

1. Marginal Revenue Product and Hiring
2. Shifts in Labor Demand and Supply
3. The Least-Cost Mix of Inputs
4. Monopsony

Externalities, public goods and common resources, the policies that address them, and how income inequality is measured.

1. Negative Externalities
2. Positive Externalities
3. Correcting Externalities
4. Rival and Excludable Goods
5. Public Goods and Free Riders
6. Measuring Income Inequality