The purpose of this course is to provide you with a basic understanding of the principles of microeconomics. At its core, the study of economics deals with the choices and decisions that have to be made in order to manage scarce resources available to us. Microeconomics is the branch of economics that pertains to decisions made at the individual level, i.e. by individual consumers or individual firms after evaluating resources, costs, and tradeoffs. Economy is referred to as the marketplace or system in which these choices interact with one another. In this course, you will learn how and why these decisions are made and how they affect one another in the economy. Few concepts learnt in ECN 212 are :
1) Supply and Demand
Here you will first introduce you to the ceteris paribus assumption, which is crucial to building correlations between economic variables. When using ceteris paribus, it is assumed that all variables – with the exception of those in explicit consideration – will remain constant. We will then examine the supply and demand models and the resulting market equilibrium that occurs where the supply curve and the demand curve intersect. We will also look at what causes 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.
2) Markets and individual maximizing behaviour
This unit concludes with the causes and ramifications of income inequality. While there is much debate about how to address long term inequality, economists can objectively measure the problem’s scope and offer options to manage this economic phenomenon. Protracted poverty and inequality can cause long term harm to an economy’s development.
3) Consumer and Producer
Consumer mainly focuses on the individual level and the characteristics that compel a consumer (to choose) to spend income on goods and services. The consumer experiences utility – a measure of satisfaction – with every purchase that he or she makes, and economists measure that utility in order to find a consumer’s optimal rate of consumption. Also, another concept to be learned is one of the most important economic agents: the producer. The producer (firm) is responsible for creating the production function (output) and is subject to various cost measures as well as the results of diminishing returns. You will explore these ideas more fully as you dive into the relationship between quantity of input and quantity of output.
4) Market Structure
This unit will introduce the concept of perfect competition, an ideal model that serves as a benchmark against which real-world market structures are analyzed. Also known as the model of pure competition, perfect competition results in an efficient allocation of resources. In the real world, however, unregulated markets (which are central to perfect competition) may fail to create desired outcomes for a number of reasons. This situation is called imperfect competition.
5) Resource Markets
Resource Markets outlines how firms decide how much they will use their resources (which include land, labor, capital, and entrepreneurial ability – all of which are required to produce the final good) and at what price. The demand for resources is derived from the demand for the final goods that are produced with them.
The above points allows you to be familiar with the concepts in ECN 212 which will help you to know about the class you are taking or you are planning to take. Deciding whether to take a course or not is very much difficult. But hopefully the information above will decrease some of your difficulty.