Microeconomics - Content Outline

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1. Theory of Consumer:
   • Utility Maximization
     • Marginal Utility
     • Marginal Rate of Substitution (MRS)
     • Opportunity Cost
   • Demand Functions and Choice
     • Change in demand/supply v. change is quantity demand/supply
     • Income and Leisure
     • Substitution and income effects
     • Demand Elasticities
       • Elastic, inelastic, unit elastic
       • Relationship between unit elasticity and total revenue
       • Relative price
     • Other Elasticities
       • Cross Price
       • Income Elasticities
   • Consumer Surplus

      

2. Theory of the Firm:
   • Production Functions (Cobb-Douglas, etc.)
     • Marginal Product
       • Law of Diminishing Returns
     • Returns to scale
   • Cost Function
     • Types of Costs
       • Total cost
       • Fixed Costs
       • Variable Costs
       • Marginal cost
       • Average cost
   • Short Run vs. Long Run
     • Sunk cost
     • Economies of scale
   • Profit Function
     • Profit Maximization
       • Producer Surplus
       • Time and Inter-temporal Preferences

          

3. Market Equilibrium:

• Supply
  • Changes in Quantity Supplied
• Changes in Supply
  • Changes in input Price
  • Changes in Technology
  • Expectations
• Demand
  • Changes in Quantity Demand
  • Changes in Demand
    • Demographic
    • Income
    • Expectations
• Equilibrium

   

IV.        Distortions to the Market:

• Price Ceilings
• Floors
• Quotas
• Taxes
  • Tax Incidences
• Subsidies
• Deadweight Loss

V.            Market Structure:

• Competitive Markets
  • Perfect competition
    • Firm's price and output decision in the short-run
    • Firm's price and output decision in the long-run
    • Short-run market supply
    • Firm entry/exit
    • Economic profit
• Monopoly
  • Barriers to entry
  • Market concentration
    • Firm's price and output decision
    • HHI
    • Definition of a firm's market
    • Economic profit
• Oligopoly
  • Nash equilibrium
  • Duopoly
• Monopolistic Competition
  • Product differentiation
    • Entry and exit
    • Firm's price and output decision in the short-run
    • Firm's price and output decision in the long-run
    • Economic profit

        VI.   Externalities and Public Goods:

• Public goods
  • Free Rider Problem
  • Tragedy of the Commons
  • Market/government failure
• Externalities
  • Information (principal agents, moral hazard, etc.)
  • Property Rights
    • Coase Theorem
  • Private and Social Costs
• Risk and Uncertainty
  • Uncertainty
  • Risk
    • Expected Value
    • Firm Beta