Key contents


Basic economic concepts :

Limited resources and unlimited wants resulted in need to make choice

Opportunity cost and trade-off along with PPC

Different types of economy

Efficiency of allocation: what to produce ;how to produce;to whom to distribute them

Absolute advantage and comparative advantage

The importance of property rights

The role of incentives in the functioning of free markets

Principle of marginal analysis


The nature and functions of product markets

Supply and demand models

Determinants of supply and demand

Movements along and shifts in the curves

Impact of government policies :Price floor and ceilings taxes tariffs quota subsidies

Consumer and producer surplus

Concept of elasticities PED XED YED PES


The nature and functions of product markets

consumer choice :utility ,the law of diminishing marginal utility

utility maximizing conditions,application in consumer decision-making and explaining the law of demand

Incomes,prices and tastes

How to derive an individual demand curve

How individual demand curve and market curve are related

Income and substitution explains the shape of demand curve


production and costs

Short-run production function : AP MP

law of diminishing marginal returns

Link between productivity and cost

Relationship among short-run cost : TC


Cost minimization

Long-run costs

Economies and diseconomies of scale ,constant returns to scale


theory of the firm:

distinction between economic and accounting profits

profit maximizing rule (marginal analysis )

Perfect competition:short-run and long-run equilibrium both for Individual firm and industry

The relationship between MR AR MC AC and profit

Adjustment process to long-run equilibrium


theory of the firm:

Sources of monopoly power

The relationship between a monopolistic demand curve and MR curve

compare P and output with those of perfect competition

Al locative efficiency dead weight loss

price discrimination


theory of the firm:

Oligopoly interdependency of firms and their tendency to collude

Basic game model payoff based identification of dominant strategies

Monopolistic competition important of product differentiation firms'

Behavior in short run and long run


Factor markets:

Labor capital and land

How factors' marginal product and marginal revenue affect the demand for that product .

diminishing marginal returns

The role of factor prices in the allocation of scare resources


Factor markets:

Labor market (minimum wages ,unions ,monopsonies and the product market monopolies )

Economic rent and capital price

How determination of factor prices determines the distribution of income and the sources of income inequality .


Market failure and the role of government:

Arguments for and against government's intervention in a competitive market

Conditions for economic efficiency marginal social benefit and marginal social cost

Externality public goods and market distribution of income


Market failure and the role of government:

Effective of government's policies such as subsidies ,taxes,quantity controls,and public provision of goods and services



Market failure and the role of government:

Key measures of income distribution (Lorenz curve and Gini coefficient )

Impact of redistribution of income on economic efficiency


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