Microeconomics: The Power of Markets

Go to Course: https://www.coursera.org/learn/microeconomics-part1

Introduction

**Course Review: Microeconomics: The Power of Markets on Coursera** In our everyday lives, we continuously make decisions influenced by the forces of economics. Whether it's choosing what to buy, deciding if we should invest time in work or leisure, or determining which route to take in our educational journey, the principles of microeconomics guide our choices. If you're looking to deepen your understanding of these foundational concepts, I highly recommend the Coursera course "Microeconomics: The Power of Markets." ### Course Overview This course offers a comprehensive introduction to the microeconomic theory of markets, focusing on their origin, functioning, and impact on our daily choices. The overarching goal is to provide students with the tools to analyze market behavior and understand the forces that drive economic decisions. Spanning five key modules, the course addresses essential microeconomic principles like scarcity, specialization, trade, supply and demand, and government intervention in markets. ### Detailed Syllabus Breakdown 1. **The Concept of Scarcity:** The course begins by tackling the fundamental concept of scarcity, which underlies all economic decisions. You will explore opportunity costs and learn to visualize trade-offs through the Production Possibilities Frontier (PPF). This segment lays the groundwork for understanding how economic growth expands our choices and helps us reach unattainable goals. 2. **Specialization & Trade:** Moving into specialization and trade, the course elucidates how comparative advantage allows individuals and nations to consume more than they can produce. By employing practical models, students will see how trade enhances resource allocation and creates opportunities to achieve beyond their original capabilities. 3. **Supply and Demand:** At the core of economic theory lies the concept of supply and demand. This module introduces you to key terminology and helps you decipher the nuances of market equilibrium, including excess demand and supply fluctuations. You will grasp how various scenarios can affect market dynamics, preparing you to engage meaningfully with economic discussions. 4. **Understanding Markets: Elasticities, Market Surplus, Efficiency, and Equity:** In this module, the course delves into elasticities—key indicators that reflect consumer responsiveness to price changes. You'll analyze the relationship between pricing, revenue generation, and overall market efficiency. This week culminates in the understanding of how markets can optimize societal benefits, enhancing your ability to appreciate complex economic interactions. 5. **When Government Intervenes:** The final module addresses the often contentious topic of government involvement in markets. By discussing price floors, ceilings, taxes, and subsidies, the course reveals the unintended consequences of well-meaning policies, prompting critical thinking about the trade-offs associated with intervention. ### Course Experience The course format is engaging, combining video lectures, interactive quizzes, and discussion forums to reinforce learning. The instructors are proficient in breaking down complex theories into digestible concepts, ensuring that even those without a prior background in economics can follow along. The blend of theoretical foundations and real-world applications makes the learning experience not just informative but also relevant to everyday life. ### Recommendations "Microeconomics: The Power of Markets" is an invaluable resource for anyone looking to understand the economic principles that shape their daily decisions. Whether you are a student, a professional, or simply a curious learner, this course will empower you with knowledge that applies not just in academia but also in practical scenarios like investing, purchasing decisions, and understanding market trends. **Final Thoughts:** I highly recommend enrolling in this course. Beyond simply learning theory, you'll develop a critical lens through which to view the economic dimensions of your daily life. Join now on Coursera and unlock the power of microeconomics!

Syllabus

The Concept of Scarcity

Where do markets come from? We will start with understanding the constraint of scarcity that we face and the concept of opportunity cost that reflects the true cost of any decision we make. We will learn to model scarcity using the Production Possibilities Frontier that allows us to visualize tradeoffs, distinguish between efficient, inefficient and unattainable points. We will also discuss how economic growth affects our options and allows us to achieve the previously unattainable.

Trade allows us to achieve the unattainable- we can consume more than we can produce on our own. We will introduce the concept of Comparative Advantage and discuss how gains from specialization allow us to use our resources efficiently. We will apply these concepts to a simple model of trade, showing that now the Consumption Possibilities Frontier allows points outside the Production Possibilities Frontier.

We will introduce the central model of Supply & Demand. This will allow you to communicate with other economists and finally understand those business pages and market updates. We will distinguish between a movement along and a movement of the supply & demand curves. We will define market equilibrium as understand that at an equilibrium price there is neither excess demand nor excess supply. We will end by a few scenarios where exogenous changes affect supply and/or demand and analyze the impact on equilibrium price and quantity.

There is a lot of terminology this week. We will introduce of the concept of elasticity of demand that measures the responsiveness of quantity demanded to a change in the price of a good. We will explore the relationship between change in price and revenue or sales and how elasticities can help us predict whether a decrease in price will increase or decrease revenue. We then introduce other elasticities of note: cross price elasticity, income elasticity and elasticity of supply. We end the week by exploring the great accomplishment of markets: maximizing the size of the pie or the total benefit to society.

In week four we learnt that the markets maximize the surplus that can be generated. So what happens if the government steps in and intervenes in the market? This week we will analyze price floors and ceilings, taxes and subsidies and learn how the best intentions sometimes lead to very unfortunate results.