Principles of Economics

22 units · 220 lessons · Beginner · Free

A comprehensive introduction to micro and macro fundamentals — 22 units, 220 lessons.

What the course covers

  1. Unit 1 Ten Principles of Economics

    How people make decisions, how they interact, and how the economy works as a whole.

    1. People Face Tradeoffs
    2. The Cost of Something Is What You Give Up to Get It
    3. Rational People Think at the Margin
    4. People Respond to Incentives
    5. Trade Can Make Everyone Better Off
    6. Markets Are Usually a Good Way to Organize Economic Activity
    7. Governments Can Sometimes Improve Market Outcomes
    8. A Country’s Standard of Living Depends on Its Productivity
    9. Prices Rise When the Government Prints Too Much Money
    10. Society Faces a Short-Run Tradeoff Between Inflation and Unemployment
    Key terms

  2. Unit 2 Thinking Like an Economist

    Models, the scientific method, the circular flow, and the production possibilities frontier.

    1. The Economist as Scientist
    2. The Role of Models
    3. The Circular-Flow Diagram
    4. The Production Possibilities Frontier
    5. Microeconomics vs. Macroeconomics
    6. Positive vs. Normative Analysis
    7. Why Economists Disagree
    8. Causation and Correlation
    9. Models, Math, and Reality
    10. Economists in Policy
    Key terms

  3. Unit 3 Interdependence and the Gains from Trade

    Absolute and comparative advantage, specialization, and the benefits of voluntary exchange.

    1. Why People (and Nations) Trade
    2. Production Possibilities Revisited
    3. Absolute Advantage
    4. Comparative Advantage
    5. Trade Terms and the Range of Mutual Gain
    6. Specialization and Total Output
    7. International Application
    8. Critiques and Limits of Comparative Advantage
    9. Outsourcing and Offshoring
    10. Policy: Free Trade vs. Protectionism
    Key terms

  4. Unit 4 The Market Forces of Supply and Demand

    How buyers and sellers interact in markets to determine prices and quantities.

    1. Markets and Competition
    2. Demand
    3. Shifts in Demand
    4. Supply
    5. Shifts in Supply
    6. Market Equilibrium
    7. Three Steps to Analyze a Change
    8. Two Markets, Joint Adjustment
    9. Limits of Supply and Demand
    10. Case Study: Markets in Action
    Key terms

  5. Unit 5 Elasticity and Its Application

    How responsive are quantity demanded and supplied to price, income, and other variables?

    1. Elasticity: The Concept
    2. Price Elasticity of Demand
    3. Determinants of Price Elasticity of Demand
    4. Total Revenue and Elasticity
    5. Elasticity Along a Linear Demand Curve
    6. Other Elasticities
    7. Price Elasticity of Supply
    8. Applications: Why Farmers Suffer Bumper Crops
    9. Applications: Drug Interdiction
    10. Applications: OPEC and Oil
    Key terms

  6. Unit 6 Supply, Demand, and Government Policies

    Price ceilings, price floors, taxes — and the law of unintended consequences.

    1. Price Controls Overview
    2. Price Ceilings: Rent Control
    3. Price Floors: Minimum Wage
    4. Taxes: Basics
    5. Tax Incidence: Who Really Pays?
    6. Deadweight Loss of Taxation
    7. Tax Revenue and the Laffer Curve
    8. Subsidies as Negative Taxes
    9. Quotas and Other Quantity Controls
    10. Case Studies: Policies in Practice
    Key terms

  7. Unit 7 Consumers, Producers, and the Efficiency of Markets

    Welfare economics: consumer surplus, producer surplus, and why markets often allocate resources well.

    1. Welfare Economics
    2. Willingness to Pay
    3. Cost and Producer Surplus
    4. Market Efficiency
    5. Market Failures Overview
    6. Property Rights and Market Function
    7. Limits of Surplus Analysis
    8. Pareto Efficiency and Beyond
    9. Second Welfare Theorem and Redistribution
    10. Conclusion: Markets, Their Power and Limits
    Key terms

  8. Unit 8 Application: The Costs of Taxation

    Deadweight loss, tax revenue, and the design of efficient tax systems.

    1. Tax Effects on Market Participants
    2. Deadweight Loss
    3. Determinants of Deadweight Loss
    4. Tax Revenue
    5. Elasticities and DWL
    6. Real-World Applications
    7. Lump-Sum and Optimal Taxes
    8. Tax Reform Principles
    9. Taxation in Open Economies
    10. Behavioral and Distributional Considerations
    Key terms

  9. Unit 9 Application: International Trade

    Who wins, who loses, and the case for free trade — with caveats.

    1. Comparative Advantage Revisited
    2. Winners and Losers from Trade
    3. Tariffs
    4. Import Quotas
    5. Arguments For Trade Restrictions
    6. Trade Agreements and the WTO
    7. Currency and the Balance of Trade
    8. Trade Adjustment and Inequality
    9. Trade and the Environment
    10. Globalization: Status and Future
    Key terms

  10. Unit 10 Externalities

    When private costs and benefits diverge from social ones, and how to fix it.

    1. Externalities Defined
    2. Negative Externalities
    3. Positive Externalities
    4. Pigouvian Taxes and Subsidies
    5. Coase Theorem
    6. Tradable Permits / Cap-and-Trade
    7. Public Policy on Externalities
    8. Climate Change Economics
    9. Examples of Externalities in Practice
    10. Behavioral Externalities
    Key terms

  11. Unit 11 Public Goods and Common Resources

    Goods that markets struggle with — and what to do about them.

    1. Categorizing Goods
    2. The Free-Rider Problem
    3. Important Public Goods
    4. Cost-Benefit Analysis
    5. Common Resources
    6. Atmospheric Commons: Climate
    7. Roads, Bridges, and Congestion
    8. Information as a Public Good
    9. Public Choice Theory
    10. Designing Public Provision
    Key terms

  12. Unit 12 The Design of the Tax System

    How governments raise revenue — and how to do it well.

    1. Government Finance Overview
    2. Federal Government Revenue
    3. State and Local Revenue
    4. Tax Efficiency
    5. Tax Equity
    6. Progressive, Proportional, Regressive
    7. Tax Incidence and Equity
    8. Tax Reform Proposals
    9. Tax Behavior and Compliance
    10. Future of Taxation
    Key terms

  13. Unit 13 The Costs of Production

    How firms turn inputs into outputs — and what it costs them.

    1. What are Costs?
    2. Production Function
    3. Total Cost Curve
    4. Average and Marginal Cost
    5. Short-Run vs. Long-Run Costs
    6. Economies of Scale
    7. Sunk Costs
    8. Cost Curves in Practice
    9. Costs and Strategic Behavior
    10. Conclusion: Costs and Firm Behavior
    Key terms

  14. Unit 14 Firms in Competitive Markets

    How price-taking firms decide output and how markets self-correct over time.

    1. Perfect Competition Defined
    2. Revenue for a Competitive Firm
    3. Profit Maximization
    4. The Shutdown Decision
    5. Firm's Supply Curve
    6. Entry, Exit, and Long-Run Equilibrium
    7. Short-Run Market Supply
    8. Welfare in Competitive Markets
    9. Real-World Competitive Markets
    10. Conclusion: The Power of Competition
    Key terms

  15. Unit 15 Monopoly

    A single seller can raise prices above marginal cost — and what to do about it.

    1. Sources of Monopoly
    2. Monopoly Demand and Revenue
    3. Monopoly Profit Maximization
    4. Monopoly's Welfare Cost
    5. Price Discrimination
    6. Public Policy Toward Monopolies
    7. Natural Monopoly Regulation
    8. Monopoly in Innovation
    9. Modern Monopoly Concerns
    10. Conclusion: Living with Monopoly
    Key terms

  16. Unit 16 Monopolistic Competition and Oligopoly

    Imperfect competition: differentiated products, few firms, strategic interaction.

    1. Imperfect Competition Overview
    2. Monopolistic Competition
    3. Product Differentiation
    4. Advertising
    5. Oligopoly
    6. Cooperation and Cartels
    7. Prisoner's Dilemma
    8. Repeated Games and Cooperation
    9. Antitrust in Oligopoly
    10. Real-World Oligopolies
    Key terms

  17. Unit 17 The Markets for the Factors of Production

    How labor, land, and capital are priced — and the link to income distribution.

    1. Factor Markets
    2. Demand for Labor
    3. Supply of Labor
    4. Labor Market Equilibrium
    5. Other Factors: Land and Capital
    6. Linkages Among Factors
    7. Monopsony and Labor Market Power
    8. Unions and Collective Bargaining
    9. Efficiency Wages
    10. Conclusion: Factor Markets and Income
    Key terms

  18. Unit 18 Earnings, Discrimination, and Inequality

    Why earnings differ, what role discrimination plays, and how inequality is measured.

    1. Why Earnings Vary
    2. Human Capital
    3. Ability, Effort, and Chance
    4. Education and Signaling
    5. Superstar Economics
    6. Discrimination
    7. Gender Wage Gap
    8. Measuring Inequality
    9. Poverty
    10. Policies to Reduce Poverty
    Key terms

  19. Unit 19 The Theory of Consumer Choice

    How consumers maximize utility subject to budget constraints — and what behavioral wrinkles complicate this.

    1. Budget Constraint
    2. Preferences and Indifference Curves
    3. Optimal Choice
    4. Income and Substitution Effects
    5. Applications of Consumer Choice
    6. Behavioral Economics: Bounded Rationality
    7. Prospect Theory
    8. Framing, Anchoring, Choice Architecture
    9. Time and Self-Control
    10. Conclusion: Modern Consumer Theory
    Key terms

  20. Unit 20 Measuring a Nation's Income

    Gross Domestic Product — the most important number in macroeconomics.

    1. GDP Defined
    2. Components of GDP
    3. Real vs. Nominal GDP
    4. GDP and Economic Well-Being
    5. Production, Expenditure, Income Approaches
    6. GDP Limitations Detailed
    7. International Comparisons
    8. GDP and Inequality
    9. Beyond GDP
    10. Conclusion: GDP as a Tool
    Key terms

  21. Unit 21 Measuring the Cost of Living

    Consumer Price Index, inflation, and adjusting for changes in purchasing power.

    1. The Consumer Price Index (CPI)
    2. Inflation Rate from CPI
    3. Problems with CPI
    4. GDP Deflator vs CPI
    5. Real vs Nominal Variables
    6. Indexation
    7. Real vs Nominal Interest Rates
    8. Inflation Expectations
    9. Costs of Inflation
    10. Hyperinflation Cases
    Key terms

  22. Unit 22 Production, Growth, Money, and Macroeconomic Policy

    Long-run growth, the monetary system, and macroeconomic stabilization.

    1. Economic Growth and Living Standards
    2. Determinants of Productivity
    3. Saving, Investment, and Growth
    4. The Monetary System
    5. Banks and Money Creation
    6. Central Bank Tools
    7. Quantity Theory and Inflation
    8. Business Cycles
    9. Aggregate Demand and Supply
    10. Monetary and Fiscal Policy
    Key terms

Other courses

Economics glossary →

Download on theApp Store