Unit 1: Overview of Economics
The study of microeconomics focuses on exchanges among consumers and firms that are in the market to purchase goods and services. In contrast, macroeconomics focuses on exchanges that take place across all of the markets within a country. We take the interrelated actions of consumers, businesses, government agencies, financial intermediaries, and global trading partners into account, as they exchange resources, goods, and services, and facilitate currency and quantity flows. Microeconomics studies how to achieve profit maximization, while macroeconomics studies how to achieve economic stability and growth on a national level.
Completing this unit should take you approximately 6 hours.
Upon successful completion of this unit, you will be able to:
- identify the determinants of demand and supply;
- describe how changes in demand and supply lead to changes in a market's equilibrium price and quantity;
- distinguish microeconomics from macroeconomics; and
- describe the circular flow model, identifying linkages between the markets for goods and resources as well as the exchanges between businesses and households.
1.1: Basic Introduction to Marketplace Economics
Read this chapter and attempt the "Try It" exercises. This chapter will help you gain familiarity and competencies with regard to basic demand and supply concepts. At a minimum, you should be able to list the factors that shift the demand curve and those that shift the supply curve after completing these chapters. This will help you prepare for similar types of analyses in the units ahead.
Read this chapter and attempt the "Try It" exercises. This chapter will help you gain familiarity and competencies with regard to basic demand and supply concepts. At a minimum, you should be able to list the factors that shift the demand curve and those that shift the supply curve after completing these chapters. This will help you prepare for similar types of analyses in the units ahead.
This exercise will help you understand demand, supply, and equilibrium; identify the determinants of demand and supply; and describe how changes in demand and supply lead to changes in a market's equilibrium price and quantity.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
1.2: Markets in Aggregate Form: An Introduction to Macroeconomics
Read this study guide, which provides a brief outline for the study of macroeconomics and will help prepare you for economics exams. This study guide covers most of the topics presented in this course.
- Read this introduction to Macroeconomics, which provides an overview of the field.
Read these lecture notes, which will provide an introduction to two important expenditure components of the GDP. Consumption is the largest expenditure component and investment is the most volatile expenditure component.
Read these lecture notes, which will provide an introduction to the scope and major topics covered by a course in macroeconomics. You will gain a solid foundation on which the upcoming units build. For instance, the course will refer numerous times to the four components of the expenditure approach – consumption, investment, government, and net exports – and will elaborate on their causes and consequences, what variables alter them, and what effects they have on aggregate demand, aggregate supply, GDP, and so forth.
- Read this chapter, which explains various approaches to achieving economic growth and introduces the roles of government and other factors relevant to defining and sustaining increases in the production possibilities frontier, in real GDP, or both over time.
Read this section for a detailed explanation of the circular flow of income model.
Watch this lecture about the circular flow of income and expenditures and the fiscal policy cycle.
Take this quiz to check your understanding of the circular flow model. You should understand the kinds of actors in an economy, and how money can transfer among them.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
Unit 1 Assessment
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.