Professional Documents
Culture Documents
a. Economics and Scarcity Basic Knowledge - Basic problems - Basic Questions - Demand and supply curves - Law of diminishing returns AL Materials - Relationship among scarcity, competition and discrimination - Free goods and scarce goods (related to scarcity and shortage) - Production Possibility Curve: scarcity, opportunity cost and efficiency
b. Elementary Demand and Supply - Demand and supply and factors affecting - Elasticity of demand and supply and factors affecting
c. Methodology - Postulates and testing of hypotheses - Normative and positive statements - Economic theories
d. Utility, wealth, income and the postulate of maximization - Equilibrium - Maximization and equilibrium
a. The inverse relationship between price and quantity demanded Basic Knowledge - Consumers behaviour - The law of demand - Demand and Quantity demanded - Elasticity of demand AL Materials - First law of demand - Second law of demand b. Equi-marginal Principle, Indifference curves and Money income constant demand curve Basic Knowledge - The law of demand - The demand curve - Money Income Vs Real Income AL Materials - Equilibrium - Equi-marginal Principle - The indifference curve and indifference map - Budget Line - Equilibrium and maximization of consumers - Changes in equilibrium: prices and income - Price consumption curve and income consumption curve - The derivation of demand curve - The derivation and properties of Engel curve c. Use value, exchange value and consumer surplus Basic Knowledge - Meanings of use value and exchange value - Measurement of use value and exchange value AL Materials - Consumer surplus: from basic to graphical approach - The Paradox of Value d. Market demand, exchange and Price as a criterion for resource allocation Basic Knowledge - The derivation of market demand from individual demand - Equilibrium and maximization AL Materials - Gains from exchange and the theorem of exchange - Price mechanism
a. The Law of Diminishing Marginal Productivity/Returns Basic Knowledge - Short Run - Fixed Factors and Variable Factors - Fixed Cost and Variable Cost - Long Run - Economies and Diseconomies of Scale AL Materials - The Diminishing Productivity - The Cost curves (TC, TVC, TFC, AC, AVC, AFC & MC) - The Productivity curves (TP, MP & AP) - Relationship between Productivity and Cost - The relationship amongst the different curves - Economies of Scale and Diseconomies of Scale and cost curves b. Cost curves and supply curves Basic Knowledge - The cost curves - Short run cost conditions - Long run cost conditions AL Materials - To derive the short run supply curve - To identify the shut down point - The meaning of Sunk/Historic Cost - The meanings of Implicit Cost & Explicit Cost - A brief introduction to Internal Cost, External Cost and Social Cost - A brief introduction to Transaction Cost c. The concepts of cost, rents and profits Basic Knowledge - The meaning of opportunity cost and its impact on economic behaviour - The meanings of rents and profits (in accounting sense) AL Materials - The meanings of economic rents and windfall profits - Economic rents as part of cost - Windfall profits and economic behaviour or resource allocation
a. Market Structure Basic Knowledge - General characteristics of market - Usually criteria used to classify markets - Monopoly, Duopoly, Oligopoly, Monopolistic Competition and Perfect Competition - Different markets as one whole spectrum AL Materials - Imperfect Competition and Perfect Competition - Price Taker (Brief Introduction) - Price Searcher (Brief Introduction) b. Resource allocation under price taking Basic Knowledge - Perfect Competition - Price Taker AL Materials - Characteristics of Price Taker - Demand curve facing an individual firm and the whole market - The wealth-maximizing equilibrium of a price taker in both short run and long run - A price takers short run supply curve and short run industry supply curve - The allocative efficiency implications of the equilibrium of a price-taking industry c. Monopoly pricing (price searching); perfect and partial (third degree) price discrimination Basic Knowledge - Price Searcher - Reasons for monopoly AL Materials - The wealth-maximizing equilibrium of a price searcher and monopoly rent - The allocative efficiency implication of simple monopoly pricing - The conditions and to identify cases of price discrimination - The effects of price discrimination on output and allocative efficiency d. A simple description of oligopoly and monopolistic competition Basic Knowledge - Oligopoly and Monopolistic Competition - Their major characteristics AL Materials - The price rigidity and inter-dependence under oligopoly - The demand curve (AR) and MR of oligopoly - Product differentiation and non-price competition under monopolistic competition - The equilibrium of monopolistic competition
a. Firms as economic organizations Basic Knowledge - General information of firms - What a firm is from students point of view - Visible hand and Invisible hand AL Materials - Market coordination and Managerial coordination
b. Basic types of business organizations Private Enterprise - Sole Proprietorship - Partnership - Company Public Enterprise - Government departments - Public Corporations
c. The existence of a firm Reasons - Costs in using the price mechanism - Firm owners as Monitors (Alchian and Demsetz) - The contractual agreement (Coase) - The factor market and the product market - The transaction costs (Cheung)
d. Problems related to the firm The Monitor - The shirking problem - Residual income The Contractual Arrangements - Time Rate - Piece Rate - Tips or Gratuities - Outright sales or Purchase
a. General Introduction - Reasons - Forms (Price Control, Quota and Taxes on Goods)
b. Price Control Basic Knowledge - Price Ceiling - Price Floor AL Materials - Effects of Price Ceiling (Price, Quantity and welfare changes) - Effects of Price Floor (Price, Quantity and welfare changes) - Rent Controls - Non-price allocation - Dissipation of rent and inefficiency under non-price allocation
c. Quota Basic Knowledge - Effects of Quota AL Materials - Welfare changes - Efficiency issues
d. Taxes Basic Knowledge - Direct tax - Indirect tax - Ad Valorem tax and Lump Sum tax - Tax incidence AL Materials - Effects of indirect tax - Effects of per unit tax (on Price takers and Price searchers) - Effects of Lump Sum tax (on Price takers and Price searchers)
a. Income Distribution AL Materials - Functional Distribution - Size Distribution - Graphical presentation Lorenz Curve
b. The demand for factors Basic Knowledge - General Review of a demand curve especially the maximum willingness to pay - The derived demand AL Materials - The meanings of Marginal Revenue Product (MRP) and Value of Marginal Product (VMP) - The differences between MRP and VMP - The Average Revenue Product (ARP) curve - The relationship between MRP/VMP and ARP - To derive the relevant demand curve of a firm under a competitive factor market
c. The supply of factors Basic Knowledge - General Review of a supply curve especially the minimum charge on a good offered AL Materials - To derive the supply curve of a factor - A backward bending supply curve of factor
d. The determination of wages in price-takers markets Basic Knowledge - Equilibrium price - Surplus and shortage AL Materials - Wage determination by supply of and demand for labour in a competitive factor market - Meanings of a surplus/shortage in the labour market - The meanings of transfer earning and economic rent. - The possibility of the existence of rent in the case of factor supply.
a. The Generalized concept of capital Basic Knowledge - Capital as a factor input - Interest as the returns to capital AL Materials - Capital as income earning assets - Interest as a representation of income
b. The existence of interest Basic Knowledge - Interest as the returns to investment - Interest as the returns to borrowing and lending AL Materials - Interest as a link between lender and borrower - The relationship between interest and delaying or bringing forward purchasing power
c. Discounting, present value, interest and investment decision AL Materials - The discounting problem: Present Value and Future Income - Equations of discounting income streams: single income, finite and infinite streams of income - Variables affecting the present value of an income stream - Maximum willingness to pay and present value - The Marginal Efficiency of Capital (MEC) and Marginal Efficiency of Investment (MEI) d. The relationship among present consumption, investment and future consumption AL Materials - The choice between present consumption and future consumption - The effect of a change in interest on the choice of the timing of consumption
e. The relationship among wealth, income & interest Basic Knowledge - The concept of stock - The concept of flow AL Materials - The concept of wealth - The concept of income - The discounting equation and the relationship between wealth, income and interest
a. Private Cost (Benefit) and Social Cost (Benefit) Basic Knowledge - The meaning of cost in economics - The meanings of explicit cost and implicit cost AL Materials - The difference between private cost (benefit) and social cost (benefit), i.e. externality - The divergence between private cost and social cost and resource allocation - The possible forms of government intervention for correcting externalities
b. Private Property Rights AL Materials - The meaning of private property rights - Property rights and market exchange
c. Pigous two road analysis d. Coase Theorem e. Productive efficiency, property rights and externality f. Transaction cost and allocative efficiency