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ACE Principles of Microeconomics (3 Semester Credits) - Course Syllabus


Principles of Microeconomics is an introductory course that teaches the fundamentals of microeconomics. This course introduces microeconomic concepts and analysis, supply and demand analysis, theories of the firm and individual behavior, competition and monopoly, and welfare economics. Students will also be introduced to the use of microeconomic applications to address problems in current economic policy throughout the course.

Textbook: Principles of Microeconomics – Open Stax - Greenlaw, ISBN-10: 1-947172-49-2,

(This text is provided to students as part of their enrollment.)

Prerequisites: No prerequisites

Course objectives:

Throughout the course, you will meet the following goals:

  • Describe how changes in income and prices affect consumer choices.
  • Explain explicit and implicit costs, accounting and economic profit, production and costs.
  • Discuss perfect competition and why it matters.
  • Describe how monopolies form and the barriers to market entry some businesses face.
  • Discuss monopolistic competition and what oligopoly is.
  • Explain: corporate mergers, regulations, and the Great Deregulation Experiment.
  • Describe the tradeoff between economic output and environmental protection.
  • Explain how governments can encourage innovation.
  • Discuss the theory of labor markets and how wages are determined.
  • Describe the measurement and causes of income inequality.

Course Evaluation Criteria

A passing percentage is 70% or higher.

Grading Scale                                                                                   

A = 95-100%

B = 88-94.9%

C = 80-87.9%

D = 70-79.9%

F = below 70%

ACE Course Retake Policy

2 (two) attempts are allowed on every quiz, and 2 (two) attempts are allowed on every final exam.

Proctorio – Video Proctoring          

All Final Exams are video proctored with Proctorio. (

ADA Policy

Excel Education Systems is committed to maintaining an inclusive and accessible environment to all students, across all of its schools, in accordance with the 1990 Federal Americans with Disabilities Act (ADA).

There is a total of 350 points in this course:

Grade Weighting

Chapter Quizzes          70%

Final Exam                  30%


Assessment Points Available Percentage of Final Grade
Chapter 1 Quiz 15 3.5%
Chapter 2 Quiz 15 3.5%
Chapter 3 Quiz 15 3.5%
Chapter 4 Quiz 15 3.5%
Chapter 5 Quiz 15 3.5%
Chapter 6 Quiz 15 3.5%
Chapter 7 Quiz 15 3.5%
Chapter 8 Quiz 15 3.5%
Chapter 9 Quiz 15 3.5%
Chapter 10 Quiz 15 3.5%
Chapter 11 Quiz 15 3.5%
Chapter 12 Quiz 15 3.5%
Chapter 13 Quiz 15 3.5%
Chapter 14 Quiz 15 3.5%
Chapter 15 Quiz 15 3.5%
Chapter 16 Quiz 15 3.5%
Chapter 17 Quiz 15 3.5%
Chapter 18 Quiz 15 3.5%
Chapter 19 Quiz 15 3.5%
Chapter 20 Quiz 15 3.5%
Final Exam 50 30.0%
Total 350 100%


Course Contents and Objectives


Chapter 1 – Welcome to Economics!
Lessons 1.1 What Is Economics, and Why Is It Important?

1.2 Microeconomics and Macroeconomics

1.3 How Economists Use Theories and Models to Understand Economic Issues

1.4 How To Organize Economies: An Overview of Economic Systems

  • Discuss the importance of studying economics
  • Explain the relationship between production and division of labor
  • Evaluate the significance of scarcity
  • Describe microeconomics
  • Describe macroeconomics
  • Contrast monetary policy and fiscal policy
  • Interpret a circular flow diagram
  • Explain the importance of economic theories and models
  • Describe goods and services markets and labor markets
  • Contrast traditional economies, command economies, and market economies
  • Explain gross domestic product (GDP)
  • Assess the importance and effects of globalization


Chapter 2 – Choice in a World of Scarcity
Lessons 2.1 How Individuals Make Choices Based on Their Budget Constraint

2.2 The Production Possibilities Frontier and Social Choices

2.3 Confronting Objections to the Economic Approach

  • Calculate and graph budget constraints
  • Explain opportunity sets and opportunity costs
  • Evaluate the law of diminishing marginal utility
  • Explain how marginal analysis and utility influence choices
  • Interpret production possibilities frontier graphs
  • Contrast a budget constraint and a production possibilities frontier
  • Explain the relationship between a production possibilities frontier and the law of diminishing returns
  • Contrast productive efficiency and allocative efficiency
  • Define comparative advantage
  • Analyze arguments against economic approaches to decision-making
  • Interpret a tradeoff diagram
  • Contrast normative statements and positive statements


Chapter 3 – Demand and Supply
Lessons 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services

3.2 Shifts in Demand and Supply for Goods and Services

3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process

3.4 Price Ceilings and Price Floors

3.5 Demand, Supply, and Efficiency

  • Explain demand, quantity demanded, and the law of demand
  • Identify a demand curve and a supply curve
  • Explain supply, quantity supplied, and the law of supply
  • Explain equilibrium, equilibrium price, and equilibrium quantity
  • Identify factors that affect demand
  • Graph demand curves and demand shifts
  • Identify factors that affect supply
  • Graph supply curves and supply shifts
  • Identify equilibrium price and quantity through the four-step process
  • Graph equilibrium price and quantity
  • Contrast shifts of demand or supply and movements along a demand or supply curve
  • Graph demand and supply curves, including equilibrium price and quantity, based on real-world examples
  • Explain price controls, price ceilings, and price floors
  • Analyze demand and supply as a social adjustment mechanism
  • Contrast consumer surplus, producer surplus, and social surplus
  • Explain why price floors and price ceilings can be inefficient
  • Analyze demand and supply as a social adjustment mechanism


Chapter 4 – Labor and Financial Markets
Lessons 4.1 Demand and Supply at Work in Labor Markets

4.2 Demand and Supply in Financial Markets

4.3 The Market System as an Efficient Mechanism for Information

  • Predict shifts in the demand and supply curves of the labor market
  • Explain the impact of new technology on the demand and supply curves of the labor market
  • Explain price floors in the labor market such as minimum wage or a living wage
  • Identify the demanders and suppliers in a financial market
  • Explain how interest rates can affect supply and demand
  • Analyze the economic effects of U.S. debt in terms of domestic financial markets
  • Explain the role of price ceilings and usury laws in the U.S.
  • Apply demand and supply models to analyze prices and quantities
  • Explain the effects of price controls on the equilibrium of prices and quantities


Chapter 5 – Elasticity
Lessons 5.1 Price Elasticity of Demand and Price Elasticity of Supply

5.2 Polar Cases of Elasticity and Constant Elasticity

5.3 Elasticity and Pricing

5.4 Elasticity in Areas Other Than Price

  • Calculate the price elasticity of demand
  • Calculate the price elasticity of supply
  • Differentiate between infinite and zero elasticity
  • Analyze graphs in order to classify elasticity as constant unitary, infinite, or zero
  • Analyze how price elasticities impact revenue
  • Evaluate how elasticity can cause shifts in demand and supply
  • Predict how the long-run and short-run impacts of elasticity affect equilibrium
  • Explain how the elasticity of demand and supply determine the incidence of a tax on buyers and sellers
  • Calculate the income elasticity of demand and the cross-price elasticity of demand
  • Calculate the elasticity in labor and financial capital markets through an understanding of the elasticity of labor supply and the elasticity of savings
  • Apply concepts of price elasticity to real-world situations


Chapter 6 – Consumer Choices
Lessons 6.1 Consumption Choices

6.2 How Changes in Income and Prices Affect Consumption Choices

6.3 Behavioral Economics: An Alternative Framework for Consumer Choice

  • Calculate total utility
  • Propose decisions that maximize utility
  • Explain marginal utility and the significance of diminishing marginal utility
  • Explain how income, prices, and preferences affect consumer choices
  • Contrast the substitution effect and the income effect
  • Utilize concepts of demand to analyze consumer choices
  • Apply utility-maximizing choices to governments and businesses
  • Evaluate the reasons for making intertemporal choices
  • Interpret an intertemporal budget constraint
  • Analyze why people in America tend to save such a small percentage of their income


Chapter 7 – Production, Costs, and Industry Structure
Lessons 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit

7.2 Production in the Short Run

7.3 Costs in the Short Run

7.4 Production in the Long Run

7.5 Costs in the Long Run

  • Explain the difference between explicit costs and implicit costs
  • Understand the relationship between cost and revenue
  • Understand the concept of a production function
  • Differentiate between the different types of inputs or factors in a production function
  • Differentiate between fixed and variable inputs
  • Differentiate between production in the short run and in the long run
  • Differentiate between total and marginal product
  • Understand the concept of diminishing marginal productivity
  • Understand the relationship between production and costs
  • Understand that every factor of production has a corresponding factor price
  • Analyze short-run costs in terms of total cost, fixed cost, variable cost, marginal cost, and average cost
  • Calculate average profit
  • Evaluate patterns of costs to determine potential profit
  • Understand how long run production differs from short run production.
  • Calculate long run total cost
  • Identify economies of scale, diseconomies of scale, and constant returns to scale
  • Interpret graphs of long-run average cost curves and short-run average cost curves
  • Analyze cost and production in the long run and short run


Chapter 8 – Perfect Competition
Lessons 8.1 Perfect Competition and Why It Matters

8.2 How Perfectly Competitive Firms Make Output Decisions

8.3 Entry and Exit Decisions in the Long Run

8.4 Efficiency in Perfectly Competitive Markets

  • Explain the characteristics of a perfectly competitive market
  • Discuss how perfectly competitive firms react in the short run and in the long run
  • Calculate profits by comparing total revenue and total cost
  • Identify profits and losses with the average cost curve
  • Explain the shutdown point
  • Determine the price at which a firm should continue producing in the short run
  • Explain how entry and exit lead to zero profits in the long run
  • Discuss the long-run adjustment process
  • Apply concepts of productive efficiency and allocative efficiency to perfectly competitive markets
  • Compare the model of perfect competition to real-world markets


Chapter 9 – Monopoly
Lessons 9.1 How Monopolies Form: Barriers to Entry

9.2 How a Profit-Maximizing Monopoly Chooses Output and Price

  • Distinguish between a natural monopoly and a legal monopoly.
  • Explain how economies of scale and the control of natural resources led to the necessary formation of legal monopolies
  • Analyze the importance of trademarks and patents in promoting innovation
  • Identify examples of predatory pricing
  • Explain the perceived demand curve for a perfect competitor and a monopoly
  • Analyze a demand curve for a monopoly and determine the output that maximizes profit and revenue
  • Calculate marginal revenue and marginal cost
  • Explain allocative efficiency as it pertains to the efficiency of a monopoly


Chapter 10 – Monopolistic Competition and Oligopoly
Lessons 10.1 Monopolistic Competition

10.2 Oligopoly

  • Explain the significance of differentiated products
  • Describe how a monopolistic competitor chooses price and quantity
  • Discuss entry, exit, and efficiency as they pertain to monopolistic competition
  • Analyze how advertising can impact monopolistic competition
  • Explain why and how oligopolies exist
  • Contrast collusion and competition
  • Interpret and analyze the prisoner’s dilemma diagram
  • Evaluate the tradeoffs of imperfect competition


Chapter 11 – Monopoly and Antitrust Policy
Lessons 11.1 Corporate Mergers

11.2 Regulating Anticompetitive Behavior

11.3 Regulating Natural Monopolies

11.4 The Great Deregulation Experiment

  • Explain antitrust law and its significance
  • Calculate concentration ratios
  • Calculate the Herfindahl-Hirschman Index (HHI)
  • Evaluate methods of antitrust regulation
  • Analyze restrictive practices
  • Explain tying sales, bundling, and predatory pricing
  • Evaluate a real-world situation of possible anticompetitive and restrictive practices
  • Evaluate the appropriate competition policy for a natural monopoly
  • Interpret a graph of regulatory choices
  • Contrast cost-plus and price cap regulation
  • Evaluate the effectiveness of price regulation and antitrust policy
  • Explain regulatory capture and its significance


Chapter 12 – Environmental Protection and Negative Externalities
Lessons 12.1 The Economics of Pollution

12.2 Command-and-Control Regulation

12.3 Market-Oriented Environmental Tools

12.4 The Benefits and Costs of U.S. Environmental Laws

12.5 International Environmental Issues

12.6 The Tradeoff between Economic Output and Environmental Protection

  • Explain and give examples of positive and negative externalities
  • Identify equilibrium price and quantity
  • Evaluate how firms can contribute to market failure
  • Explain command-and-control regulation
  • Evaluate the effectiveness of command-and-control regulation
  • Show how pollution charges impact firm decisions
  • Suggest other laws and regulations that could fall under pollution charges
  • Explain the significance of marketable permits and property rights
  • Evaluate which policies are most appropriate for various situations
  • Evaluate the benefits and costs of environmental protection
  • Explain the effects of ecotourism
  • Apply marginal analysis to illustrate the marginal costs and marginal benefits of reducing pollution
  • Explain biodiversity
  • Analyze the partnership of high-income and low-income countries in efforts to address international externalities
  • Apply the production possibility frontier to evaluate the tradeoff between economic output and the environment
  • Interpret a graphic representation of the tradeoff between economic output and environmental protection


Chapter 13 – Positive Externalities and Public Goods
Lessons 13.1 Why the Private Sector Underinvests in Innovation

13.2 How Governments Can Encourage Innovation

13.3 Public Goods

  • Identify the positive externalities of new technology
  • Explain the difference between private benefits and social benefits and give examples of each
  • Calculate and analyze rates of return
  • Explain the effects of intellectual property rights on social and private rates of return
  • Identify three U.S. Government policies and explain how they encourage innovation
  • Identify a public good using nonexcludable and non-rival as criteria
  • Explain the free rider problem
  • Identify several sources of public goods


Chapter 14 – Labor Markets and Income
Lessons 14.1 The Theory of Labor Markets

14.2 Wages and Employment in an Imperfectly Competitive Labor Market

14.3 Market Power on the Supply Side of Labor Markets: Unions

14.4 Bilateral Monopoly

14.5 Employment Discrimination

14.6 Immigration

  • Describe the demand for labor in perfectly competitive output markets
  • Describe the demand for labor in imperfectly competitive output markets
  • Explain what determines the going market wage rate
  • Define monopsony power
  • Explain how imperfectly competitive labor markets determine wages and employment, where employers have market power
  • Explain the concept of labor unions, including membership levels and wages
  • Evaluate arguments for and against labor unions
  • Analyze reasons for the decline in U.S. union membership
  • Explain how firms determine wages and employment when a specific labor market combines a union and a monopsony
  • Analyze earnings gaps based on race and gender
  • Explain the impact of discrimination in a competitive market
  • Identify U.S. public policies designed to reduce discrimination
  • Explain how immigration affects labor market outcomes


Chapter 15 – Poverty and Economic Inequality
Lessons 15.1 Drawing the Poverty Line

15.2 The Poverty Trap

15.3 The Safety Net

15.4 Income Inequality: Measurement and Causes

15.5 Government Policies to Reduce Income Inequality

  • Explain economic inequality and how the poverty line is determined
  • Analyze the U.S. poverty rate over time, noting its prevalence among different groups of citizens
  • Explain the poverty trap, noting how government programs impact it
  • Identify potential issues in government programs that seek to reduce poverty
  • Calculate a budget constraint line that represents the poverty trap
  • Identify the antipoverty government programs that comprise the safety net
  • Explain the the safety net programs' primary goals and how these programs have changed over time
  • Discuss the complexities of these safety net programs and why they can be controversial
  • Explain the distribution of income, and analyze the sources of income inequality in a market economy
  • Measure income distribution in quintiles
  • Calculate and graph a Lorenz curve
  • Show income inequality through demand and supply diagrams
  • Explain the arguments for and against government intervention in a market economy
  • Identify beneficial ways to reduce the economic inequality in a society
  • Show the tradeoff between incentives and income equality


Chapter 16 – Information, Risk, and Insurance
Lessons 16.1 The Problem of Imperfect Information and Asymmetric Information

16.2 Insurance and Imperfect Information

  • Analyze the impact of both imperfect information and asymmetric information
  • Evaluate the role of advertisements in creating imperfect information
  • Identify ways to reduce the risk of imperfect information
  • Explain how imperfect information can affect price, quantity, and quality
  • Explain how insurance works
  • Identify and evaluate various forms of government and social insurance
  • Discuss the problems caused by moral hazard and adverse selection
  • Analyze the impact of government regulation of insurance


Chapter 17 – Financial Markets
Lessons 17.1 How Businesses Raise Financial Capital

17.2 How Households Supply Financial Capital

17.3 How to Accumulate Personal Wealth

  • Describe financial capital and how it relates to profits
  • Discuss the purpose and process of borrowing, bonds, and corporate stock
  • Explain how firms choose between sources of financial capital
  • Show the relationship between savers, banks, and borrowers
  • Calculate bond yield
  • Contrast bonds, stocks, mutual funds, and assets
  • Explain the tradeoffs between return and risk
  • Explain the random walk theory
  • Calculate simple and compound interest
  • Evaluate how capital markets transform financial capital


Chapter 18 – Public Economy
Lessons 18.1 Voter Participation and Costs of Elections

18.2 Special Interest Politics

18.3 Flaws in the Democratic System of Government

  • Explain the significance of rational ignorance
  • Evaluate the impact of election expenses
  • Explain how special interest groups and lobbyists can influence campaigns and elections
  • Describe pork-barrel spending and logrolling
  • Assess the median voter theory
  • Explain the voting cycle
  • Analyze the interrelationship between markets and government


Chapter 19 – International Trade
Lessons 19.1 Absolute and Comparative Advantage

19.2 What Happens When a Country Has an Absolute Advantage in All Goods

19.3 Intra-industry Trade between Similar Economies

19.4 The Benefits of Reducing Barriers to International Trade

  • Define absolute advantage, comparative advantage, and opportunity costs
  • Explain the gains of trade created when a country specializes
  • Show the relationship between production costs and comparative advantage
  • Identify situations of mutually beneficial trade
  • Identify trade benefits by considering opportunity costs
  • Identify at least two advantages of intra-industry trading
  • Explain the relationship between economies of scale and intra-industry trade
  • Explain tariffs as barriers to trade
  • Identify at least two benefits of reducing barriers to international trade


Chapter 20 – Globalization and Protectionism
Lessons 20.1 Protectionism: An Indirect Subsidy from Consumers to Producers

20.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions

20.3 Arguments in Support of Restricting Imports

20.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally

20.5 The Tradeoffs of Trade Policy

  • Explain protectionism and its three main forms
  • Analyze protectionism through concepts of demand and supply, noting its effects on equilibrium
  • Calculate the effects of trade barriers
  • Discuss how international trade influences the job market
  • Analyze the opportunity cost of protectionism
  • Explain how international trade impacts wages, labor standards, and working conditions
  • Explain and analyze various arguments that are in support of restricting imports, including the infant industry argument, the anti-dumping argument, the environmental protection argument, the unsafe consumer products argument, and the national interest argument
  • Explain dumping and race to the bottom
  • Evaluate the significance of countries’ perceptions on the benefits of growing trade
  • Explain the origin and role of the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT)
  • Discuss the significance and provide examples of regional trading agreements
  • Analyze trade policy at the national level
  • Evaluate long-term trends in barriers to trade
  • Assess the complexity of international trade
  • Discuss why a market-oriented economy is so affected by international trade
  • Explain disruptive market change

ACE Principles of Microeconomics (3 Semester Credits)