Section I. Microeconomics Course Outline

Infusionomics DVD Training Series Outline

Instructor: Dr. Gerald J. Swanson

1. What is economics?
   1. Micro vs. macroeconomics
   2. Basic assumptions
   3. Positive economic statements
   4. Normative economic statements
2. Three Basic Economic Questions
   1. Three Fundamental Questions
      1. What to produce?
      2. How to produce?
      3. For Whom to produce
   2. Three allocative considerations
      1. Scarcity
      2. Discrimination
      3. Competition
3. Production Possibilities Curve
   1. Main Determinants
   2. Opportunity Costs
   3. Growth
   4. Unemployment
   5. Present vs. Future Consumption
4. Review of Sections 1-3
5. Demand
   1. The Law of Demand
   2. The Demand Schedule and Demand Curve
6. Determinants of Demand – other than price
   1. Consumer Income/Wealth
   2. Consumer Expectation of Income/Wealth
   3. Consumer Expectation of future prices
   4. Prices of Related Products and Services – Substitutes and Complements
   5. Consumer Preferences
   6. Number of Consumers
7. Supply
   1. The Law of Supply
   2. Opportunity Cost
   3. Incentives
8. Determinants of Supply – other than price
   1. Price of Inputs – Costs of Production
   2. Technology
   3. Price of Related Goods in Production
   4. Number of Suppliers
   5. Sellers’ Expectation of Future Price
9. Market Equilibrium
   1. Effects of Change in Demand
   2. Effects of Change in Supply
10. Forces that Move the Market Toward Equilibrium
    1. Know What Market is Being Studied
    2. Know What Has Changed
    3. Know Whether Supply or Demand Will Be Affected
    4. Know Which Way to Shift the Curve
    5. Know When to Stop
    6. Never Shift More Than One Curve for Each Change
11. Price of Elasticity of Demand
    1. High sensitivity to changes in price signals elasticity; Low sensitivity to changes in price signal inelasticity.
    2. What makes consumers sensitive or insensitive to changes in the price of a product?
       1. Definitions of Price Elasticity
          1. Intuitive: the degree of responsiveness of quantity demanded to a change in price
          2. Verbally: percentage change in quantity demanded divided by percentage change in price
          3. Mathematically: %ΔQd / %ΔP
       2. Determinants of Elasticity
          1. Number of Substitutes
          2. Habit –  brand loyalty or addictive quality
          3. Percent of Income
          4. Time to Adjust to the Price Change