Steven M. Reff Economics Lecturer University of Arizona (2007 - 2016) The 2015 University of Arizona Five-Star Faculty Award
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• Topic 1.1 Scarcity, choice, and opportunity cost
• Topic 1.2 Production possibilities curve
• Topic 1.3 Comparative advantage, specialization, and trade
• Topic 1.4 Economic systems
• Topic 1.5 Property rights and the role of incentives (discussed in Unit 6)
• Topic 1.6 Marginal analysis
CLEP® Principles of Microeconomics Course Preparation
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NOTE: This website is not a College Board® sponsored website. Everything on this
website can be used by teachers or students to get a better understanding of their
college-level Principles of Microeconomics course.
Unit 1: Basic Economic Concepts (10%–16%)
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• Topic 2.1 Determinants of Supply and Demand
• Topic 2.2 Market Equilibrium
• Topic 2.3 Consumer surplus, producer surplus, and market efficiency
• Topic 2.4 Price and Quantity Controls
• Topic 2.5 Elasticity
• Price, income, and cross-price elasticities of demand
• Price elasticity of demand and total revenue
• Price elasticity of supply
• Topic 2.6 Tax incidence and deadweight loss
Unit 2: Supply and Demand (15%–20%)
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• Topic 3.1 Total Utility and Marginal Utility
• Topic 3.2 Utility Maximization: Equalizing Marginal Utility Per Dollar
• Topic 3.3 Individual and Market Demand Curves
• Topic 3.4 Income and Substitution Effects
Unit 3: Theory of Consumer Choice (5% - 10%)
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• Topic 4.1 Production Functions: Short and Long Run
• Topic 4.2 Marginal Product and Diminishing Returns
• Topic 4.3 Short-Run Costs
• fixed cost, variable cost, average cost, marginal cost, and
total cost
• the relationship between productivity and marginal cost
• Topic 4.4 Long-Run Costs and Economies of Scale
• Topic 4.5 Revenue vs. Profit
• Accounting versus economic profits
• Normal profit
• Profit maximization: MR=MC rule
• Topic 5.1 Characteristics of different market structures
• Topic 5.2 Perfect competition
• Profit maximization
• Short-run supply and shut-down decision
• Firm and market behaviors in short-run and long-run equilibria
• Topic 5.3 Efficiency and perfect competition
• Topic 6.1 Monopoly
• Sources of market power
• Profit maximization
• Inefficiency of monopoly
• Price discrimination
• Natural monopoly
• Topic 6.2 Oligopoly
• Interdependence, collusion, and cartels
• Game theory and strategic behavior with payoff matrix
• Dominant strategies and Nash equilibrium
• Topic 6.3 Monopolistic competition
• Product differentiation and role of advertising
• Profit maximization
• Short-run and long-run equilibrium
• Excess capacity and inefficiency
• Topic 7.1 Derived Factor Demand
• Topic 7.2 Marginal Revenue Product
• Topic 7.3 Labor Market and Firms’ Hiring of Labor
• Topic 8.1 Public and private goods
• Excludability, rivalry, and free-rider problem
• Provision of public goods
• Topic 8.2 Externalities
• Marginal social benefit and marginal social cost
• Positive externalities
• Negative externalities
• Remedies
• Topic 8.3 Public policy to promote competition
• Antitrust policy
• Regulation
• Topic 8.4 Income distribution
• Income inequality
• Lorenz curve and Gini coefficient
• Topic 8.5 World Trade + Tariff
Unit 4: Production Costs, Revenue, and Profit (10%–15%)
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Unit 5: Perfect Competition (10%–15%)
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Unit 6: Imperfect Competition (Monopoly, Oligopoly, Monopolistic Competition) (10%–15%)
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Unit 7: Factors Market (6%–12%)
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Unit 8: Market Failure and The Role of Government (8 - 14%)
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