Microeconomics (Course Guide)

Economic Thinking

eTextbook Readings | Principles of Economics | OpenStax

NOTE: Be sure to review key terms, concepts, questions, and problems at the end of each chapter!

Do you understand how to...?

• distinguish between normative and positive analysis
• identify trade-offs between choices (opportunity costs)
• construct a production possibility curve (PPC) to demonstrate trade-offs
• evaluate changes in benefits to changes in cost (marginal analysis)
• identify examples of increasing opportunity costs (diminishing returns)
• analyze the interaction between the international and the domestic economy
• correlate scarcity with unlimited wants in the definition of economics
• diagnose the choices inherent in the notion of opportunity cost.
• illustrate the choices inherent in the production possibilities curve.
• outline a situation demonstrating marginal analysis
• outline a situation demonstrating diminishing returns.
• critique the inherent contradictions between full employment and full production.
• categorize the factors of production and their returns.
• diagram the behavior of average total costs and the 3 regoins inherent in that diagram.