Microeconomics Principles

About this course: This course offers an introduction to the functions of individual decision-makers—both consumers and producers—within the larger economic system. Emphasis is on the nature and functions of product markets, the theory of the firm under varying conditions of competition and monopoly, and the role of government in promoting efficiency in the economy. Most people make the incorrect assumption that economics is ONLY the study of money. My primary goal in this course is to shatter this belief. During this course, we will be addressing the above questions as well as many more relating to: -the environment -love and marriage -crime -labor markets -education -politics -sports -business My main goal is to show you the way economists think and how to use this analytical system to answer questions related not only to these and other important human issues, but to anything you end up doing with your life after this class. After all, as you will quickly find out, I believe that everything is economics!

Created by:  University of Illinois at Urbana-Champaign

• Taught by:  Dr. José J. Vázquez-Cognet, Clinical Professor

  Department of Economics

Level Beginner Commitment Customizable based on your level of interest Language English, Subtitles: Spanish, Chinese (Simplified) How To Pass Pass all graded assignments to complete the course. User Ratings 4.8 stars Average User Rating 4.8See what learners said Coursework

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University of Illinois at Urbana-Champaign The University of Illinois at Urbana-Champaign is a world leader in research, teaching and public engagement, distinguished by the breadth of its programs, broad academic excellence, and internationally renowned faculty and alumni. Illinois serves the world by creating knowledge, preparing students for lives of impact, and finding solutions to critical societal needs.

Syllabus


WEEK 1


Course Orientation
You will become familiar with the course, your classmates, and our learning environment. The orientation will also help you obtain the technical skills required for the course.


1 video, 4 readings, 1 practice quiz expand

1. Reading: Syllabus
2. Video: Microeconomic Principles at a Glance
3. Reading: About the Discussion Forums
4. Practice Quiz: Orientation Quiz
5. Reading: Updating Your Profile
6. Discussion Prompt: Getting to Know Your Classmates
7. Reading: Social Media

Introduction and Basic Principles



Welcome to your first week in Microeconomics Principles! As you will quickly see, the things you learn in this class will probably help you see the world in a different way. Economics is not just about money, as you may have incorrectly assumed. On the contrary, as you will learn in this lesson, economics is about how society distributes scarce resources. And, since almost anything in the world is a scarce resource, from fossil fuels to nice guys, we can apply the rules of economics to pretty much anything.


6 videos, 1 reading expand

1. Reading: Week 1 Overview
2. Video: 1.1. Welcome to Principles of Microeconomics
3. Video: 2.1. What is Economics?
4. Video: 2.2. Opportunity Costs
5. Video: 2.3. Net Marginal Benefit Principle
6. Video: 2.4. The Invisible Hand Principle
7. Video: 2.5. Trade
8. Discussion Prompt: Week 1 Discussion Questions

Graded: Week 1 Quiz

WEEK 2


Supply and Demand



Welcome to your second week in Microeconomics Principles! This module we will cover the hallmark framework of the field: the supply and demand model. I am sure that if you knew any economics words before enrolling in this course those two words were supply and demand. This module you will finally learn what all the fuss is about.


17 videos, 1 reading expand

1. Reading: Week 2 Overview
2. Video: 1.1. What is a Market?
3. Video: 1.2. The Market for Romantic Relationships
4. Video: 2.1. The Determinants of Demand
5. Video: 2.2. The Demand Function, Schedule, and Curve
6. Video: 2.3. Introducing Comparative Statistics: Changes in the Price
7. Video: 2.4. A Change in Demand, Part 1
8. Video: 2.5. A Change in Demand, Part 2
9. Video: 3.1. The Determinants of Supply
10. Video: 3.2. The Supply Equation, Schedule, and Curve
11. Video: 3.3. Price of an Input Changes
12. Video: 3.4. A Change in Technology
13. Video: 4.1. Supply Surplus, Supply Shortage, and Equilibrium Price
14. Video: 5.1. Changes in Demand: Price of Related Goods
15. Video: 5.2. Changes in Demand: Consumer Preferences
16. Video: 5.3. A Change in Supply
17. Video: 5.4. Simultaneous Change in Supply and Demand
18. Video: 6.1. Demand and Supply Conclusion
19. Discussion Prompt: Week 2 Discussion Questions

Graded: Week 2 Quiz

WEEK 3


Market Efficiency and Government Policies



Welcome to Week 3! Last module we introduced the supply and demand model to explain how free markets work. One of the main concepts we learned about free markets was that they tend to gravitate toward an “equilibrium” price and quantity. This module we will use the same conceptual model to answer one important question: Are free markets the best way to distribute society’s resources?


10 videos, 1 reading expand

1. Reading: Week 3 Overview
2. Video: 1.1. Do We Need Silly Products?
3. Video: 2.1. What is Consumer Surplus?
4. Video: 2.2. Consumer Surplus and the Demand Curve
5. Video: 3.1. What is Producer Surplus?
6. Video: 3.2. Producer Surplus and the Supply Curve
7. Video: 4.1. Total Surplus: The Graphical Argument for Free Markets
8. Video: 5.1. Price Ceilings
9. Video: 5.2. Price Floors
10. Video: 6.1. Could We Reduce the Shortage of Human Organs?
11. Video: 6.2. Application: Playoff Tickets and Scalping Laws
12. Discussion Prompt: Week 3 Discussion Questions

Graded: Week 3 Quiz

WEEK 4


Elasticities



Welcome to the fourth week! This module we will cover one of my favorite economics concepts: elasticity. It is one of my favorites because of how useful it is to analyze policy implications, as well as its usefulness for business managers. This will be obvious to you when you read one of the discussion topics for this module: Should we legalize marijuana?


14 videos, 1 reading expand

1. Reading: Week 4 Overview
2. Video: 1.1. Introduction to Elasticity
3. Video: 2.1. Definition and Classifying Price Elasticities of Demand
4. Video: 2.2. Price Elasticity of Demand and Revenue
5. Video: 2.3. Determinants of Price Elasticity of Demand
6. Video: 2.4. Price Elasticities of Demand and the Linear Demand Curve
7. Video: 3.1. Income Elasticity of Demand
8. Video: 3.2. Cross-Price Elasticity of Demand
9. Video: 4.1. Definition of Price Elasticity of Supply
10. Video: 4.2. Determinants of Price Elasticity of Supply
11. Video: 5.1. Introduction to Per-Unit Taxes
12. Video: 5.2. The Distributional Effects of Tax
13. Video: 5.3. Taxes and Surplus
14. Video: 6.1. Should Black Dog Increase the Price of Their Sandwiches?
15. Video: 6.2. Other Applications of Price Elasticity
16. Discussion Prompt: Week 4 Discussion Questions

Graded: Week 4 Quiz

WEEK 5


Production and Costs



Welcome to your fifth week! This module we will begin covering the theory of the firm, which will take us basically three modules to finish. Economists call this section of the course, "The Economics of the Lemonade Stand." And that title makes perfect sense, since the concepts we cover can be used by anyone, from someone owning a lemonade stand, to a car manufacturing company, to a hair salon, to a burrito stand, etc.


9 videos, 1 reading expand

1. Reading: Week 5 Overview
2. Video: 1.1. Introduction to Production
3. Video: 2.1. Demonstration: The Production of Tennis Balls
4. Video: 2.2. The Production Process at a Glance
5. Video: 2.3. A Numerical Example: Cooks in the Kitchen
6. Video: 3.1. Fixed, Variable, and Total Costs
7. Video: 3.2. Marginal Costs
8. Video: 3.3. Cost Curves
9. Video: 4.1. Back to Black Dog
10. Video: 4.2. Applications
11. Discussion Prompt: Week 5 Discussion Questions

Graded: Week 5 Quiz

WEEK 6


Competitive Output
Welcome to your sixth week! This module we continue our discussion of the firm by focusing on those firms working in a perfectly competitive (or competitive) environment.


10 videos, 1 reading expand

1. Reading: Week 6 Overview
2. Video: 1.1. Introduction to Competitive Output
3. Video: 2.1. The Maximizing Profit Assumption
4. Video: 2.2. The Profit Equation
5. Video: 2.3. The Profit Maximizing Rule
6. Video: 3.1. Perfect Competition
7. Video: 4.1. The Short-run Decision
8. Video: 4.2. Long-run Competitive Output
9. Video: 4.3. Using the Long-run Equilibrium Model
10. Video: 4.4. The Long-run Supply Curve
11. Video: 5.1. Conclusion to Competitive Output
12. Discussion Prompt: Week 6 Discussion Questions

Graded: Week 6 Quiz

WEEK 7


Firms with Market Power



So, why is it that when you fly the person sitting next to you in the plane probably paid a different price for the ticket than what you paid for it? And why does Starbucks charge so much for its coffee even though you can buy coffee at Dunkin’ Donuts for almost half of that price? This module we are finishing our discussion of the firm by focusing on cases that should be more familiar to you than the perfect competition examples we have been using.


10 videos, 1 reading expand

1. Reading: Week 7 Overview
2. Video: 1.1. Pricing with Market Power: An Introduction
3. Video: 2.1. Market Structures With Pricing Power
4. Video: 2.2. Sources of Market Power
5. Video: 3.1. When Marginal Revenue is Less than Price
6. Video: 3.2. Marginal Revenue and the Price Elasticity of Demand
7. Video: 4.1. Perfect Price Discrimination
8. Video: 4.2. Imperfect Price Discrimination
9. Video: 4.3. Other Pricing Strategies
10. Video: 5.1. The Social Cost of Market Power
11. Video: 6.1. Pricing with Market Power: Conclusion
12. Discussion Prompt: Week 7 Discussion Questions

Graded: Week 7 Quiz

WEEK 8


Public Goods, Common Resources, and Externalities



And so we have arrived at the last week. This course has gone too fast! This module we will be discussing market failures. A market failure is a situation when the market does not do a good job of distributing resources among members of society. In fact, in all of these cases the market IS the problem.


13 videos, 1 reading expand

1. Reading: Week 8 Overview
2. Video: 1.1. Introduction to Public Goods, Common Resources, and Externalities
3. Video: 2.1. How to Classify Goods
4. Video: 2.2. What Type of Good is This?
5. Video: 3.1. The Public Goods Game
6. Video: 3.2. Public Goods
7. Video: 3.3. Solving the Free Rider
8. Video: 4.1. The Tragedy of the Commons
9. Video: 4.2. How to Deal with the Tragedy of the Commons
10. Video: 5.1. Negative Externalities
11. Video: 5.2. Positive Externalities
12. Video: 5.3. Private Solutions
13. Video: 5.4. Governmental Solutions
14. Video: 6.1. Conclusion to Public Goods, Common Resources, and Externalities
15. Discussion Prompt: Week 8 Discussion Questions
16. Discussion Prompt: Final Reflections

Graded: Week 8 Quiz