• Unit 1: Introduction to Economics

    This unit sets the stage for our journey into the principles of microeconomics. We begin by defining economics and its foundations, emphasizing the concepts of scarcity, choice, and opportunity cost and the need for economic models and theories. Next, we delve into the trade-offs economic agents face when confronting scarcity and applying marginal analysis in their decision-making processes. Once we have discussed the introductory economic toolbox, we finish this unit by introducing basic economic models.

    Completing this unit should take you approximately 5 hours.

    • 1.1: Economics Unveiled: A Beginner's Journey

      Many students believe economics is challenging due to its complex theories, mathematical components, and specific language. Some are initially anxious when they hear the word economics. But there is nothing to fear! Economics is simply a set of interesting questions organized around a simple fact: there are not enough resources to satisfy all our needs and wants. How do we decide?

      This section teaches that economics shapes how we understand everything around us. Analyzing how you got to drink that first-morning coffee or why you have decided to enroll in this course is economic thinking. Economics studies how humans make decisions in the face of scarcity. These can be individual, family, business, or societal decisions. If you look around carefully, you will see that scarcity is a fact of life.

    • 1.2: Scarcity, Choices, Incentives, and Opportunity Costs

      Why are you reading this unit? This question has countless answers. Microeconomics approaches queries like this from a fascinating perspective: what alternative activity would you engage in if you were not reading this unit? Your answer will uncover the rationale behind our first question.

      Here is our thought process. Your time is a limited resource, and you must decide how to allocate it. When you choose an option (such as reading this unit), you do so with an incentive (like improving your skills). However, you are also forgoing another activity that would have occupied your time. This simple paragraph introduces the relationship between four essential economic concepts: scarcity, choices, incentives, and opportunity costs.

    • 1.3: Economic Decision-Making: Budget Constraint and Thinking in Marginal Terms

      Every choice you make comes down to choosing between different options that are competing with one another. Here, we analyze how economic agents make decisions when faced with budget constraints. This decision-making process involves comparing the benefits and costs of consuming a little more or less of a certain good or service. In economics, we say economic agents think in marginal terms when they consume or produce a little more or a little less.

    • 1.4: The Economic Toolbox: Interpreting Diagrams and Equations

      We can use mathematics to explain practically every important concept in microeconomics. Equations and diagrams help explain and illustrate economic concepts. Mathematics is a tool to help you grasp economic concepts and their relations.

    • 1.5: Economic Models

      When visiting a new city, the first thing we typically reach for is an online or printed map. When studying economics, you should first reach for economic models. They help simplify a reality that would be too vast to analyze otherwise. In this section, we analyze why economists use models and theories to simplify reality and how they use them. We also introduce two basic economic models: the production possibilities frontier and the circular flow model.

    • Unit 1 Assessment

      • Receive a grade