Econ 110 students will be able to
- Understand why there are gains from being able to trade and to specialize and, with regard to the latter, be able to explain the difference between comparative advantage and absolute advantage and the importance of comparative advantage in determining what individuals and economies choose to do.
- Understand the basic principles of optimization and, in particular, the importance of thinking about "marginal" effects.
- Identify and analyze "incentives" and evaluate whether and under what conditions "incentives matter."
- Understand the economic model of the behavior of "individuals or entities who have money who want goods or services" (i.e., demand).
- Understand the economic model of the behavior of "individuals or entities who have or produce goods or services who want money" (i.e., supply).
- Analyze how markets work with regard to 4 and 5 above: prices as incentives; how prices adjust and how demanders and suppliers respond to price changes.
- Understand and be able to use the concept of "market equilibrium."
- Understand the difference between short run and long run behavior for 4 and 5 above.
- Distinguish between and analyze short run and long run market adjustments.
- Analyze market adjustments using a basic graphical analytical economic model and incorporating 4 through 9 above.
- Analyze normative claims for perfectly competitive markets (i.e., "efficiency").
- Understand and be able to analyze "market distortions" including: taxes, subsidies, price ceilings, price floors, barriers to entry and prohibited activities using a simple analytical model of supply and demand.
- Understand and be able to analyze "market failures" including: market power (monopoly), negative externalities, positive externalities and public goods using a simple analytical model of a supply and demand.
- Understand the nature and construction of key macroeconomic data: GDP, real GDP, per capita GDP, per capita real GDP, price indexes (e.g., CPI), money (e.g. M1, M2 etc), labor force and unemployment, Federal deficit, National debt.
- Understand the definitions and effects of: inflation/deflation, economic growth/stagnation, business cycles.
- Understand the determinants of potential GDP and the growth in potential GDP.
- Understand the key elements of, and problems created by, macroeconomic shocks.
- Develop a basic understanding of the institutions associated with fiscal policy and monetary policy.
- Understand and evaluate fiscal and monetary policy responses to macroeconomic shocks.
- Use economics to evaluate the current debates about counter cyclical policies; economic growth policies; and government funding policies (i.e., deficits and debt).