Microeconomics: The Power of Markets from Coursera

We make economics decisions every day: what to buy, whether to work or play, what to study. We respond to markets all the time: prices influence our decisions, markets signal where to put effort, they direct firms to produce certain goods over others. Economics is all around us.

This course is an introduction to the microeconomic theory of markets: why we have them, how they work, what they accomplish. We will start with the concept of scarcity and how specialization according to comparative advantage helps us achieve more than we could alone. Next we model a marked using the tools of Supply and Demand and learn what well working markets accomplish and what their limit are. We end by exploring the impact of government intervention on perfect markets. Examples are taken from everyday life, from goods and services that we all purchase and use. We will apply the theory to current events and policy debates through weekly exercises. These will empower you to be an educated, critical thinker who can understand, analyze and evaluate market outcomes.

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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.

Specialization & Trade

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.

Supply and Demand

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.

Understanding Markets: Elasticities, Market Surplus, Efficiency, and Equity

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.

When Government Intervenes

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.

Good to know

Know what's good

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, and possible dealbreakers

Introduces supply and demand, which are essential concepts in economics

Uses examples from everyday life to make the concepts understandable

Suitable for beginners looking to gain a foundational understanding of microeconomics

Led by experienced instructor Rebecca Stein

May require additional reading and research for a deeper understanding

Reviews summary

Intro to microeconomics: theory-based

According to students, this introductory microeconomics course stands out for its theory-based approach, with a professor who starts from foundational principles and derives concepts in a clear and engaging manner. Learners appreciate the well-structured lectures, but some note that the initial ones can be a bit slow. The course includes quizzes and videos, though some students wish there were more of the former. Overall, learners find the course worthwhile and well-paced.

Course is well-structured and easy to follow.

Professor explains complex concepts well.

"The professor starts from first principles and derives her way through remaining concepts in a simple, yet elegant fashion."

Videos are too long.

"Fewer but longer videos would have been easier."

Not enough quizzes.

"Some of the quiz questions were really good, I wish there had been more of these."

Initial lectures are a bit slow.

"It takes a little while to appreciate the methodology, and the first few lectures seem a bit boring"

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Microeconomics: The Power of Markets with these activities:

Explore Khan Academy's Microeconomics Tutorials

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Supplement your learning with interactive tutorials that provide clear explanations and examples.

Browse courses on Scarcity

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Visit the Khan Academy website and navigate to the Microeconomics section.
Select and watch relevant video tutorials.
Complete the accompanying exercises to test your understanding.

Delve into 'Economics in One Lesson' by Henry Hazlitt

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Enhance your comprehension of economic principles and their practical implications by reading a foundational work in the field.

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Acquire the book through a library or online retailer.
Read the book thoroughly, taking notes of key concepts.
Reflect on the insights presented and connect them to the course material.

Assess Your Understanding through Practice Questions

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Test your knowledge and identify areas for improvement by solving practice questions and problems.

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Obtain practice questions from textbooks, online resources, or the course instructor.
Attempt to solve the questions independently.
Review your solutions and identify areas where you need further clarification.

Four other activities

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Challenge Yourself with Market Dynamics Simulations

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Reinforce your understanding of market dynamics and decision-making by engaging in interactive simulations.

Browse courses on Supply and Demand

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Identify suitable simulation platforms or exercises online.
Set up an account and familiarize yourself with the simulation environment.
Run simulations under various market conditions and analyze the outcomes.

Engage in Study Group Discussions

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Foster deeper understanding and retention of concepts through collaborative learning and peer support.

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Form or join a study group with classmates.
Regularly meet to discuss course material, ask questions, and share insights.
Prepare questions or topics to facilitate productive discussions.

Create Market Analysis Infographics

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Deepen your understanding by creating visual representations of market dynamics and consumer behavior.

Browse courses on Market Analysis

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Identify a specific market or industry to analyze.
Gather data on market trends, consumer demographics, and competitive factors.
Design and create visually engaging infographics that present your analysis.

Develop a Marketing Plan for a New Product or Service

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Apply your knowledge to a practical scenario by creating a comprehensive marketing plan that considers market dynamics, consumer behavior, and competitive factors.

Browse courses on Marketing Strategy

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Define the target audience and their needs.
Conduct market research to analyze competition and identify opportunities.
Develop a comprehensive marketing strategy that includes branding, pricing, and distribution.
Outline key performance indicators (KPIs) to track the effectiveness of your plan.

Career center

Learners who complete Microeconomics: The Power of Markets will develop knowledge and skills that may be useful to these careers:

Market Researcher

As a Market Researcher, you will learn to study the demand for products and services. You will explore the behaviors and preferences of consumers through surveys and other data collection methods. This course will equip you with the tools you need to gather and interpret data on markets. You will also learn about the economic theory of markets to predict market trends and make recommendations to businesses on how to adjust their pricing and marketing strategies.

See salaries and explore the career path for Market Researcher

Marketing Manager

As a Marketing Manager, you will lead the development and implementation of marketing campaigns. You will use your knowledge of market trends to target specific audiences and create persuasive marketing messages. This course will help you understand the economic factors that influence consumer behavior. You will also learn how to use data to track the effectiveness of your marketing campaigns.

See salaries and explore the career path for Marketing Manager

Public Policy Analyst

As a Public Policy Analyst, you will research and analyze public policy issues. You will use your knowledge of economics to assess the potential impact of different policy proposals. This course will help you understand the economic principles that guide public policy. You will also learn how to use economic data to evaluate the effectiveness of public programs.

See salaries and explore the career path for Public Policy Analyst

Financial Analyst

As a Financial Analyst, you will evaluate the financial health of companies and make recommendations on investments. You will use your knowledge of economics to assess the risks and rewards of different investment opportunities. This course will help you understand the role of markets in the financial system. You will also learn how to use economic data to make sound investment decisions.

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Data Scientist

As a Data Scientist, you will use data to solve business problems. You will use your knowledge of economics to analyze economic data and develop economic models. This course will provide you with a solid foundation in microeconomic theory. You will also learn how to use economic tools to analyze real-world problems.

See salaries and explore the career path for Data Scientist

Consultant

As a Consultant, you will provide advice to businesses and organizations on how to improve their performance. You will use your knowledge of economics to analyze business data and identify areas for improvement. This course will help you understand the economic principles that drive business decision-making. You will also learn how to use economic data to make recommendations on how to improve business operations.

See salaries and explore the career path for Consultant

Investment Banker

As an Investment Banker, you will help companies raise capital. You will use your knowledge of economics to assess the financial health of companies and make recommendations on how to structure their offerings. This course will help you understand the role of markets in the financial system. You will also learn how to use economic data to make sound investment decisions.

See salaries and explore the career path for Investment Banker

Economist

As an Economist, you will study the production, distribution, and consumption of goods and services. You will use your knowledge of economics to analyze economic data and develop economic models. This course will provide you with a solid foundation in microeconomic theory. You will also learn how to use economic tools to analyze real-world problems.

See salaries and explore the career path for Economist

Business Analyst

As a Business Analyst, you will help businesses improve their performance. You will use your knowledge of economics to analyze business data and identify areas for improvement. This course will help you understand the economic principles that drive business decision-making. You will also learn how to use economic data to make recommendations on how to improve business operations.

See salaries and explore the career path for Business Analyst

Product Manager

As a Product Manager, you are responsible for the development and launch of new products. You will use your knowledge of economics to assess the demand for new products and develop pricing and marketing strategies. This course will help you understand the economic factors that influence consumer behavior. You will also learn how to use data to track the effectiveness of your product launches.

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Journalist

As a Journalist, you will report on economic news and events. You will use your knowledge of economics to explain complex economic issues to the public. This course will help you understand the economic principles that shape the news. You will also learn how to use economic data to support your reporting.

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Lawyer

As a Lawyer, you may use economic principles to analyze legal issues. This course will help you understand the economic principles that underlie the legal system. You will also learn how to use economic data to support your legal arguments.

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Teacher

As a Teacher, you may teach economics to students. This course will provide you with a solid foundation in microeconomic theory. You will also learn how to use economic tools to explain economic concepts to students.

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Social Worker

As a Social Worker, you may help people who are struggling financially. This course will help you understand the economic factors that contribute to poverty and inequality. You will also learn how to use economic data to evaluate the effectiveness of social programs.

See salaries and explore the career path for Social Worker

Urban Planner

As an Urban Planner, you may use economic principles to design cities. This course will help you understand the economic factors that affect urban development. You will also learn how to use economic data to assess the impact of different planning decisions.

See salaries and explore the career path for Urban Planner