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EEC 2304 Introduction to Microeconomics

Course Description

Introduces the neoclassical theory of price determination. Includes supply and demand analysis, production and cost theory, market structures, externalities and public goods, factor payments, income distribution, and informational asymmetries.

Course Objectives

After completing this course, students will be able to

  • Discuss the neoclassical theory of market prices and distribution
  • Use economic analysis to predict causes and consequences of price changes, market failures, and income distribution
  • Define market structures and describe how they relate to firms’ costs and profitability

Week 1

Lecture: Economics and Economic Reasoning
Lecture: The Production Possibility Model, Trade, and Globalization
Lecture: Trade and Government Policy


  • Define economics and list the coordination problems that economies must solve
  • Discuss the concept of scarcity
  • Differentiate between positive and normative economics
  • Demonstrate opportunity cost with a production possibility curve
  • Show that through comparative advantage and trade, production possibilities increase
  • Explain how globalization and outsourcing are part of a global process guided by the law of one price

Week 2

Lecture: Economic Institutions
Lecture: The U.S. Economy
Lecture: Politics, Deficits, and Debt


  • Define market economy
  • Compare and contrast socialism with capitalism
  • Describe how businesses, households, and governments interact in a market economy
  • Summarize briefly the advantages and disadvantages of various types of businesses
  • Explain why, even though households have the ultimate power, much of the economic decision making is done by business and government
  • State six roles of government
  • Explain why global policy issues differ from national policy issues
  • Define the terms deficit, surplus, and debt
  • Differentiate between real and nominal deficits and surpluses
  • Summarize the current debate about the budget and Social Security system

Week 3

Lecture: Supply and Demand


  • Explain and show graphically the determination of price and quantity in a market
  • Distinguish a shift in demand or supply from a movement along a demand or supply curve
  • Show the effect of a shift in demand and supply on equilibrium price and quantity 

Week 4

Lecture: Using Supply and Demand


  • Explain real-world events using supply and demand
  • Demonstrate the effect of a price ceiling and a price floor on a market
  • Explain the effect of excise taxes and tariffs on equilibrium price and quantity

Week 5

Lecture: Economic Growth, Business Cycles, Unemployment, and Inflation
Lecture: National Income Accounting


  • Explain how unemployment is measured and state some of the categories of unemployment
  • Explain the four phases of the business cycle
  • Explain the concept of a price index and identify the major price indexes reported for the U.S. economy
  • Define gross domestic product and list the four expenditure components of GDP
  • State some limitations of national income accounting
  • Use GDP figures to compare GDP among countries and measure economic welfare over time
  • Distinguish between real and nominal GDP

Week 6

Lecture: Growth and Productivity
Lecture: Aggregate Demand, Aggregate Supply, and Modern Macroeconomics


  • Define economic growth and its sources
  • Distinguish diminishing marginal productivity from decreasing returns to scale
  • Define and explain fiscal and monetary policy
  • Discuss the historical development of modern macroeconomics
  • Explain the shape of the aggregate demand curve and what factors shift it

Week 7

Lecture: Money, Banking, and the Financial Sector
Lecture: Monetary Policy and the Debate About Macroeconomic Policy
Lecture: Monetary Policy and the Debate About Macro Policy


  • Explain what money is and its functions
  • Summarize the process of the creation of money
  • Explain the demand for money and the role of the interest rate
  • Summarize the structure and duties of the Federal Reserve Banks
  • List the three tools of monetary policy and explain how they work

Week 8

Lecture: Inflation and Its Relationship to Unemployment and Growth


  • Explain how inflation expectations are formed
  • Explain demand-pull and cost-push inflation
  • Explain the different views on the relationship between inflation and growth 

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. December 2013