Economics

Define scarcity, opportunity cost, and trade-offs using real-world examples

Explain the concept of marginal analysis and its role in economic decision-making

Interpret a production possibilities frontier (PPF) and explain the concept of efficiency

Describe how specialization and trade create mutual gains using the principle of comparative advantage

Identify the functions of different economic systems (market, command, mixed)

Distinguish between positive and normative economic statements

Explain the role of incentives in shaping individual and firm behavior

Plot and interpret a demand curve and identify factors that shift demand

Plot and interpret a supply curve and identify factors that shift supply

Determine equilibrium price and quantity graphically and algebraically

Predict how simultaneous shifts in supply and demand affect equilibrium outcomes

Calculate price elasticity of demand and interpret its value

Calculate income elasticity and cross-price elasticity of demand

Explain price elasticity of supply and its determinants

Analyze the effects of price ceilings and price floors on market outcomes

Define total utility and marginal utility, and apply the law of diminishing marginal utility

Construct a budget constraint and interpret its slope as the relative price of goods

Define and illustrate indifference curves and their properties (including the concept of ordinal utility)

Determine the optimal consumer choice using the tangency condition between the budget constraint and an indifference curve

Decompose the effect of a price change on quantity demanded into substitution and income effects

Derive an individual's demand curve from the utility-maximization framework

Distinguish between short-run and long-run production decisions for a firm

Calculate and graph total product, marginal product, and average product of labor

Explain the law of diminishing marginal returns in the context of short-run production

Calculate and graph a firm's total fixed cost, total variable cost, and total cost

Calculate and graph average fixed cost, average variable cost, average total cost, and marginal cost

Explain the relationship between the marginal cost curve and the marginal product curve

Describe economies and diseconomies of scale using the long-run average total cost curve

Distinguish between accounting profit and economic profit

State the profit-maximization rule (MR = MC) and apply it to a firm's output decision

Identify the characteristics of perfect competition and determine short-run profit or loss graphically

Explain how firm entry and exit lead to zero economic profit in a long-run competitive equilibrium

Identify the characteristics of monopoly and explain the sources of market power

Determine a monopolist's profit-maximizing price and output

Calculate the deadweight loss resulting from monopoly pricing compared to a competitive outcome

Explain the concept of price discrimination and identify its necessary conditions

Describe monopolistic competition and explain the role of product differentiation

Determine the short-run equilibrium (profit or loss) for a monopolistically competitive firm

Illustrate the long-run adjustment to zero economic profit in monopolistic competition

Explain the key characteristics of oligopoly, focusing on strategic interdependence

Analyze strategic interaction using a simple Prisoner's Dilemma payoff matrix

Explain the concept of a Nash equilibrium and apply it to a two-player game

Describe collusion and cartels, and explain the economic incentives that cause them to break down

Compare price, output, and efficiency across the four main market structures

Define and identify positive and negative externalities with real-world examples

Use a supply-and-demand diagram to show how externalities lead to market inefficiency

Explain how Pigouvian taxes and subsidies can be used as corrective policy tools

Apply the Coase theorem to a simple externality scenario with low transaction costs

Define public goods using the concepts of non-rivalry and non-excludability, and explain the free-rider problem

Define common resources and analyze the tragedy of the commons

Describe how asymmetric information can cause adverse selection and moral hazard

Explain how price regulation and antitrust policy are used to address monopoly power

Interpret the circular flow model showing interactions between households, firms, and the government

Define Gross Domestic Product (GDP) and calculate it using the expenditure approach (C+I+G+NX)

Calculate GDP using the income approach

Distinguish between nominal GDP and real GDP and compute the GDP deflator

Explain the limitations of GDP as a measure of economic well-being

Define and calculate the unemployment rate and labor force participation rate

Define inflation and compute the inflation rate using the Consumer Price Index (CPI)

Distinguish between real and nominal interest rates using the Fisher equation

Describe the phases of a business cycle (expansion, peak, contraction, trough)

Explain the components of the aggregate demand (AD) curve and identify factors that cause it to shift

Explain the Keynesian consumption function and the concept of the expenditure multiplier

Plot and interpret the short-run and long-run aggregate supply (SRAS/LRAS) curves

Use the AD-AS model to analyze a recessionary gap and an inflationary gap

Use the AD-AS model to illustrate demand-pull and cost-push inflation

Explain the short-run Phillips curve and the trade-off between inflation and unemployment

Describe the main components of government revenue and expenditure

Explain how expansionary and contractionary fiscal policy affect aggregate demand

Distinguish between automatic stabilizers and discretionary fiscal policy

Evaluate the limitations of fiscal policy, including implementation lags and political constraints

Explain the concepts of a budget deficit, a budget surplus, and the national debt

Analyze the short-run effects of government debt, including the concept of crowding out

Analyze the long-run implications of persistent government debt

Describe the principles of taxation (equity, efficiency) and distinguish between progressive, regressive, and proportional taxes

Define money and explain its three functions (medium of exchange, unit of account, store of value)

Describe how commercial banks create money through the fractional-reserve banking system

Calculate the simple money multiplier given a required reserve ratio

Explain the role of a central bank and its primary monetary policy tools (open market operations, policy rates, reserve requirements)

Use the AD-AS model to show the transmission mechanism of expansionary and contractionary monetary policy

Explain the quantity theory of money (MV = PY) and its implications for long-run inflation

Describe the limits of monetary policy, including the liquidity trap and the zero lower bound

Explain the gains from trade using the Ricardian model of comparative advantage

Analyze the effects of tariffs and quotas on domestic consumers, producers, and welfare using supply-demand diagrams

Define the balance of payments and distinguish between the current account and the capital (financial) account

Explain how supply and demand for currencies determine exchange rates in a floating system

Describe the effects of currency appreciation and depreciation on net exports

Compare the advantages and disadvantages of fixed versus floating exchange rate regimes

Explain the policy trilemma (the impossible trinity) for open economies

Evaluate common arguments for and against free trade policies