Unit 3: The Theory of the Firm

Can include, but is not limited to:
Economic costs (explicit and implicit costs, normal profit and economic profit, short-run costs--fixed, variable, total, per-unit, marginal--and shifts of cost curves), long-run costs--firm sizes and costs, cost curve, economies and diseconomies of scale--law of diminishing marginal returns)
Four market models
1) Perfect competition (characteristics, occurrence, relevance) -- Demand as seen by a perfectly competitive seller, profit maximization in the short-run, marginal cost and short-run supply, profit maximization in the long-run, efficiency
Perfect monopoly (characteristics, occurrence, relevance) -- Barriers to entry, monopoly demand, output and price determination, economic effects of a monopoly, price discrimination, regulated monopolies, efficiency
Monopolistic competition (characteristics, occurrence, relevance) -- Price and output, product variety, efficiency
Oligopoly (characteristics, occurrence, relevance) -- Game theory, kinked-demand curve theory, advertising, efficiency

Can include, but is not limited to:
In this next unit we will learn about national income and aggregate price levels. This is done through a general discussion of the nature and shape of the aggregate demand and supply curves. You will look at the differences between the Keynesian and classical views of the shape of the aggregate supply curve and the importance of the shape in determining the effect of changes in aggregate demand on the economy.

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