Content Outline and Competencies:

I. Basic Economic Concepts
   A. Define economic systems.
      1. Describe the fundamental economic questions.
      2. Contrast capitalism and socialism.
   B. Summarize the methodology of economics.
      1. Describe what economists do.
      2. Describe the theorizing or model-building process.
      3. Demonstrate the use of graphs.
      4. Summarize the role of statistics and the use of economic
statistics in economic analysis.
   C. Define scarcity.
      1. Summarize the tradeoffs within an economy and define the
opportunity cost of making a choice.
      2. Describe the Production Possibilities Model.
   D. Explain how markets function using supply and demand analysis.
      1. Describe the Circular Flow of Income model.
      2. Define the laws of demand and supply.
      3. Explain the determinants of demand and supply.
      4. Outline the effects of changes in demand and supply on prices and
the amount traded in any market.
   E. Evaluate capitalism.
      1. List and explain the pros and cons associated with capitalism.
      2. List and describe the market failures associated with capitalism
and describe governmental attempts to correct them.

II. Microeconomics
   A. Describe consumer theory.
      1. Define elasticity.
      2. Define marginal utility and describe its role in effecting
consumer behavior.
   B. Describe the theory of the firm.
      1. Outline legal forms of business.
      2. Describe the economic functions of the firm.
      3. Define diminishing returns and production costs.
      4. Outline the characteristics of the four market structures.
      5. Describe the behavior of the profit maximizing firm within pure
competition, pure monopoly, oligopoly and monopolistic competition.
      6. Summarize the effects of firm behavior under different market
structures.
   C. Summarize the role of government in regulating business.
      1. Summarize anti-trust legislation.
      2. Define natural monopolies.
      3. Outline consumer protection policies.
      4. Describe environmental protection policies.
      5. Summarize deregulation policies.
   D. Describe labor market.
      1. Demonstrate the use of demand and supply analysis on the context
of a labor market.
      2. Describe how wages are determined in labor markets.
      3. Summarize the effects of labor unions in labor markets.
   E. Describe how income is distributed.
      1. List the sources of income.
      2. Summarize cause of poverty and possible remedies.
      3. Define discrimination.

III. Macroeconomics
   A. Describe national economic problems.
      1. Define the different types of unemployment.
      2. Define the different types of inflation.
      3. Define economic growth and list the ingredients for economic
growth.
   B. Describe national income accounting.
      1. List the components of GDP.
      2. Contrast real GDP and nominal GDP.
      3. Outline the components of national income.
   C. Contrast Classical and Keynesian approaches to the business cycle.
      1. Describe Say's Law.
      2. Describe aggregate demand and supply analysis in national income
determination.
      3. Summarize supply-side approaches to addressing national economic
problems.
   D. Describe fiscal policy.
      1. Summarize Keynesian fiscal policy recommendations when addressing
national economic problems.
      2. Outline alternative recommendations to the Keynesian approach
when addressing national economic problems.
      3. Contrast deficits and national debt.
   E. Monetary policy
      1. Define the functions of money.
      2. Summarize the role of commercial banks in money creation.
      3. Describe the structure and the functions of the Federal Reserve
System.
      4. Define monetary policy.
      5. Contrast Keynesian and Monetarist recommendations for the use of
monetary policy.

IV. International Economics
   A. Describe international trade.
      1. Summarize the role of specialization and comparative advantage in
international trade.
      2. List and describe protectionist policies.
      3. Outline the role of trade negotiations in international trade.
   B. Describe international finance.
      1. Identify the role of exchange rate determination in international
finance.
      2. Describe the balance of payments for a nation.
      3. Define the gold standard.
      4. Contrast floating and fixed exchange rates.

Content Outline and Competencies:

I. Basic Economic Concepts

A. Define economics and describe what economists do.

B. Contrast positive from normative economics.

C. Contrast macroeconomics and microeconomics.

D. List economic resources and explain why they are scarce.

E. Define opportunity cost, scarcity, productive and allocative efficiency, and economic growth, and illustrate these concepts in the context of the Production Possibilities Model.

F. List the ingredients for economic growth.

G. Describe the circular flow model of economic activity.

H. Demonstrate the use of demand and supply analysis in equilibrium price and quantity determination in any market.

1. Define demand and derive a demand curve.

2. Describe what causes an increase and a decrease in demand and express this graphically.

3. Define supply and derive a supply curve.

4. Describe what causes an increase and decrease in supply and express this graphically.

5. Graphically determine the equilibrium price and quantity within a market and explain why this price and quantity traded is equilibrium.

6. Illustrate graphically a surplus and a shortage and predict the impact of a surplus and a shortage on the price within a market.

7. Graphically illustrate and predict the impact of a change in demand or a change in supply on the equilibrium price and quantity within a market.

8. Apply demand and supply analysis to product, resource and loanable funds markets.

I. Explain the relationship between the product, resource and loanable funds markets.

J. Evaluate the pros and cons associated with capitalism's market-oriented economy.

K. Summarize how government has attempted to address the market failures associated with capitalism.

II. The Causes and Consequences Associated with the Business Cycle

A. Define and contrast gross domestic product (GDP), net national product (NNP), national income (NI), personal income (PI) and disposable income (DI).

B. Define the different types of unemployment:

1. Frictional (transitional) unemployment

2. Structural unemployment

3. Cyclical unemployment

C. Define the different types of inflation:

1. Demand-pull inflation

2. Cost-push inflation

D. Define the business cycle and describe its different phases (peak, contraction, trough and expansion).

E. Contrast the basic explanations for causes of the business cycle according to the Keynesian and New Classical schools of thought.

F. Describe the cause-effect chain relationship through which a change in total spending (aggregate demand, aggregate expenditures) affects inventories, GDP, employment and national income, as well as inflation over the course of the business cycle, according to Keynesians.

G. Graphically illustrate a consumption function and explain what causes shifts in the consumption function.

H. Graphically illustrate an investment function and explain what causes changes in the investment function.

I. Graphically illustrate an equilibrium national income level and how it may change.

J. Calculate the simple Keynesian multiplier and explain its role and its relevance in calculating changes in national income.

III. Fiscal Policy

A. Define discretionary fiscal policy and describe how it is implemented.

B. Summarize discretionary fiscal policy options considered appropriate by Keynesians over the course of the business cycle.

C. Define non-discretionary fiscal policy and describe how it is implemented.

D. Demonstrate graphically non-discretionary fiscal policy and explain how it adds stability to the business cycle.

E. Evaluate the use of fiscal policy from the Keynesian and New Classical perspectives.

F. Contrast a fiscal deficit from public debt.

G. Analyze the consequences of national debt for a nation.

IV. Monetary Policy

A. Define money and the money supply.

B. Explain how a single bank can change the money supply.

C. Explain how an entire banking system can change the money supply.

D. Calculate a simple money multiplier and explain its role in a changing money supply.

E. Explain the institutional structure of the Federal Reserve System.

F. Define monetary policy and explain how it is implemented.

G. Describe the tools of monetary policy and what is considered to be its appropriate use from a Keynesian and New Classical perspective.

H. Evaluate the effectiveness of monetary policy from a Keynesian perspective.

V. International Economics

A. Define and contrast absolute and comparative advantage and explain which is relevant for international trade.

B. Describe the benefits and costs to a nation of free and open international trade.

C. Explain why most economists are free trade advocates.

D. List and define the various kinds of international trade barriers.

E. Summarize and evaluate the arguments for and against protectionism.

F. Evaluate a fixed and floating exchange rate system.

G. Explain the impact of a change in a nation's exchange rate on its flow of exports and imports.

H. Describe a nation's balance of payments.

Content Outline and Competencies:

I. Foundations of Microeconomics - Supply and Demand

A. Define the law of demand.

1. Given a demand schedule, derive a demand curve.

2. Differentiate between demand and quantity demanded.

B. Identify the determinants of demand.

C. Demonstrate demand principles through examples.

D. Define the law of supply.

1. Given a supply schedule, derive a supply curve.

2. Differentiate between supply and quantity supplied.

E. Identify the determinants of supply.

F. Demonstrate supply principles through examples.

G. Define equilibrium.

1. Given demand and supply tables, derive equilibrium.

2. Create a graph illustrating equilibrium.

3. Determine the surplus or shortage based upon the demand and supply graphs.

4. Predict the market effects of either a surplus or a shortage.

H. Define elasticity.

1. Derive the elasticity coefficient stated as a formula.

2. Find the value of an elasticity coefficient.

3. Describe how price changes total revenue.

4. Given price and total revenue, determine elasticity of demand and supply.

5. Explain the effect of time upon elasticity, including the market period, the short run and the long run.

6. Describe cross and income elasticity of demand and cite examples of each.

7. Define the key terms associated with elasticity including price ceilings and price floors.

8. Apply the principles of elasticity to government intervention to control prices.

II. Consumer Behavior

A. State the law of demand.

1. Define income and substitution effects.

2. Define the law of diminishing marginal utility.

a. Define the term utility.

b. Differentiate between total and marginal utility.

c. Express utility graphically.

B. Describe how rational consumers maximize utility by comparing the marginal utility-to-price ratios of the products they purchase.

1. Solve numeric problems relating to utility maximization.

2. List several examples of utility maximization.

III. Production and Cost

A. Relate the law of diminishing returns to a firm's short-run production costs.

B. Explain why economic costs include both explicit (revealed and expressed) costs and implicit costs (present but not obvious) costs.

C. Explain the relationship between inputs and outputs.

D. Describe the concept of marginal productivity.

1. Differentiate between marginal and total product.

2. Define the law of diminishing marginal productivity.

3. Solve numeric problems relating to marginal productivity.

E. Differentiate between short-run costs and long-run costs.

1. Define different types of short-run costs.

2. Examine the relationship between the various short-run costs.

3. Solve numeric problems relating to short-run costs.

4. Develop long-run costs from short-run costs.

5. Generate long-run curves from short-run curves.

IV. Market Structures in the Product Market

A. State the characteristics of a perfectly competitive firm.

1. Define revenue, costs and profit.

2. Determine the profit maximizing output and price using total revenue and total cost.

3. Determine the profit maximizing output and price using marginal revenue and marginal cost.

4. Develop the curves from the relevant revenue and cost.

5. Solve numeric problems relating to profit maximization for a perfectly competitive firm

6. State the positive and negative traits of a perfectly competitive product market

B. State the characteristics of a monopoly.

1. Determine the profit maximizing output and price using total revenue and cost

2. Determine the profit maximizing output and price using the marginal revenue and cost

3. Develop the curves from the relevant revenue and cost.

4. Solve numeric problems relating to profit maximization for a monopoly.

5. State the positive and negative traits of a monopoly.

C. State the characteristics of a monopolistically competitive firm.

1. Relate how this model was derived by combining perfect competition and monopoly models.

2. Determine the profit maximizing output and price using marginal revenue and cost.

3. Develop the curves from the relevant revenue and costs.

4. Solve numeric problems relating to profit maximization for a monopolistically competitive firm.

5. State the positive and negative traits of a monopolistically competitive firm.

6. Define the wastes of monopolistic competition.

7. Examine the impact of advertising upon this mode.

D. State the characteristics of an oligopolistic firm.

1. Determine the profit maximizing output and price using marginal revenue and cost.

2. Develop the curves from the relevant revenue and costs.

3. Apply game theory to the behavior of a person under the oligopoly market model.

4. Examine the four oligopoly models: the kinked demand curve, collusive pricing, price leadership and cost plus pricing.

5. Solve numeric problems relating to profit maximization for an oligopolistic firm.

6. State the positive and negative traits of an oligopolistic firm.

V. Market Structures in the Factor Market

A. State the various factor markets.

B. Develop the marginal productivity theory of resource demand.

C. Relate the marginal productivity theory to the resource labor.

1. Derive the demand for and supply of labor under perfectly competitive conditions.

2. Determine the wage rate and the employment level under perfect competition.

3. Derive the marginal resource cost and the supply curve of labor under imperfect competition (monopsony).

4. Determine the wage rate and the employment level under monopsony and bilateral monopoly.

D. Solve numeric problems relating to the optimum combination of resources.

1. Apply the least-cost rule.

2. Apply the profit-maximizing rule.