About This Chapter
Fundamentals of Microeconomics - Chapter Summary
In this chapter, we'll help you build a solid understanding of the fundamentals of microeconomics. You'll learn about concepts like economic scarcity and comparative advantage. Some of the other topics we'll cover include:
- Opportunity cost
- Production possibilities model and curve
- Benefits of specialization
- Causes of supply and demand change
- Price elasticity
- Economic barriers to entry and free markets
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1. Economic Scarcity and the Function of Choice
Discover the foundation of the social science of economics as we explore the basic economic problem of scarce resources and unlimited wants using key definitions that create a framework for understanding everyday behavior in a nation.
2. Opportunity Cost: Definition & Real World Examples
Learn the most important concept of economics through the use of real-world scenarios that highlight both the benefits and the costs of decisions. Opportunity cost is a simple yet powerful principle that reveals how to make the best economic decisions possible, and it explains why people make the choices they do.
3. How to Calculate Opportunity Cost
Learn the formula that reveals the economic value in any major choice between two possibilities. Every choice involves tradeoffs, and opportunity cost shows you how to measure these tradeoffs.
4. Applying the Production Possibilities Model
Producers in the economy use a visual model, called the production possibilities curve, to make the most efficient production decisions and maximize output. Learn how this model reveals the tradeoffs of every production decision with the simplified example of an economy that produces only two goods.
5. Shifts in the Production Possibilities Curve
In this lesson you will learn how changes inside an economy lead to changes in the production possibilities of a nation. See how different scenarios from everyday life lead to shifts in the production possibilities curve.
6. Comparative Advantage: Definition and Examples
Understand the definition of comparative advantage, using two goods as an example. This key lesson incorporates the basic foundations of economics into one foundational theory explaining what goods and services that people,and nations, should produce and for whom they should produce it.
7. Gains From Trade and the Benefit of Specialization
Explore one of the most widely accepted ideas in economics - the idea that nations benefit from specialization and exchange, reaping gains from trade.
8. Causes of Supply and Demand Changes in Microeconomics
Learn what causes movements along the supply and demand curves. See how market forces work to cause these movements and the important role that price plays in this.
9. Price Elasticity of Demand in Microeconomics
Discover the definition and formula for price elasticity of demand. See some real-world examples of how it is calculated, and find out what it means for demand of a good to be inelastic or elastic.
10. Competition Within Free Markets: Types & Summary
We live in a free market economy, but that doesn't mean there is always free competition. In this lesson, you'll learn about perfectly competitive markets, monopolies, monopolistic markets and oligopolies.
11. Barriers to Entry in Economics: Definition, Types & Examples
Economic barriers to entry are part of the reason some companies thrive and others fail. Learn what barriers to entry are and why they are so important to understand before entering a specific business or market. Read about some current-day examples.
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