Economics

Units

1. 1

   Scarcity, choice and opportunity cost

   3 lessons

   1. Scarcity and choiceExplain why scarcity forces every person and society to choose, and sort needs from wants.
   2. Opportunity cost and trade-offsFind the opportunity cost of a decision, show it on a production possibilities curve and weigh a trade-off at the margin.
   3. Economic systemsCompare traditional, command, market and mixed economies by how each answers what, how and for whom to produce.
2. 2

   Supply and demand

   4 lessons

   1. DemandState the law of demand, read a demand curve and tell a move along the curve from a shift of the whole curve, with the factors that shift it.
   2. SupplyState the law of supply, read a supply curve and tell a move along the curve from a shift of the whole curve, with the factors that shift it.
   3. Equilibrium and changes in priceFind the equilibrium price and quantity, explain surpluses and shortages and predict how a shift in supply or demand changes the price.
   4. ElasticityExplain price elasticity of demand, compute it from percent changes and say what it means for a seller's revenue.
3. 3

   Markets, prices and competition

   4 lessons

   1. Prices as signals and incentivesExplain how prices tell buyers and sellers what to do and how incentives change behavior.
   2. Competition and market structuresCompare perfect competition, monopoly, oligopoly and monopolistic competition by the number of sellers, the product and the power over price.
   3. Costs, revenue and profitSeparate fixed and variable costs, compute revenue and profit and explain how a firm decides how much to produce.
   4. Labor markets and wagesExplain how supply and demand set wages, why education and skills raise pay and what a wage floor does.
4. 4

   Market failures and the role of government

   3 lessons

   1. ExternalitiesExplain positive and negative externalities and how taxes, subsidies and regulation address them.
   2. Public goods and the free-rider problemDefine public goods by non-rivalry and non-excludability and explain why markets under-provide them.
   3. Government's roleDescribe how government regulates, taxes and protects consumers and competition, and explain the limits of intervention.
5. 5

   Money, banks and interest

   3 lessons

   1. Functions and forms of moneyDescribe money as a medium of exchange, a store of value and a unit of account, and tell the main forms money has taken.
   2. Banks and the Federal ReserveExplain how banks create credit by lending deposits, how deposit insurance protects savers and what the Federal Reserve does.
   3. Interest, borrowing and savingCalculate simple and compound interest and compare what saving earns with what borrowing costs.
6. 6

   Measuring the economy: GDP, inflation and unemployment

   4 lessons

   1. Gross domestic productDefine GDP, calculate it as C + I + G + (X - M) for a small economy and tell nominal GDP from real GDP.
   2. Inflation and price indexesExplain inflation, calculate a price index and an inflation rate from a basket of goods and say how inflation changes purchasing power.
   3. UnemploymentDefine the labor force, calculate the unemployment rate and tell frictional, structural and cyclical unemployment apart.
   4. The business cycleDescribe the four phases of the business cycle, expansion, peak, contraction and trough, and what each means for jobs and prices.
7. 7

   Fiscal and monetary policy

   3 lessons

   1. Fiscal policyExplain taxes and government spending as tools to steer the economy, and distinguish the deficit from the national debt.
   2. Monetary policyExplain how the Fed uses interest rates and the money supply to influence spending, jobs and inflation.
   3. Aggregate demand and supplyUse aggregate demand and supply to show how policies and shocks change output and the price level.
8. 8

   International trade and exchange rates

   3 lessons

   1. Why nations tradeExplain absolute and comparative advantage and show with numbers how trade gives both countries more.
   2. Trade barriers and agreementsDescribe tariffs, quotas and free trade agreements and who gains and loses from each.
   3. Exchange ratesExplain how exchange rates are set by supply and demand for currencies and how a stronger or weaker currency changes imports and exports.
9. 9

   Economic growth and development

   3 lessons

   1. What drives economic growthExplain how capital, labor, technology and institutions raise productivity and living standards, and compute how fast growth doubles income.
   2. Measuring developmentCompare countries by GDP per capita, the human development index and income inequality, and say what each measure leaves out.
   3. Challenges of developmentDescribe barriers to development such as poverty traps, debt, weak institutions and geography, and ways countries and others try to address them.
10. 10

    Personal finance: budgeting, saving and credit

    4 lessons

    1. Budgeting and savingBuild a monthly budget, set a savings goal with a date and explain what an emergency fund is for.
    2. Credit and debtExplain how credit scores, credit cards, loans and interest work and how to avoid debt traps.
    3. Investing and riskCompare stocks, bonds and savings, explain diversification and describe the trade-off between risk and return.
    4. Taxes, insurance and protecting yourselfRead a pay stub, explain how income taxes and insurance work and recognise scams and identity theft.