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PRINCIPLES OF MICROECONOMICS

SELF-PACED COURSE


1. About this Course

This course covers the fundamentals of Microeconomics that are usually covered throughout an introductory one-semester college course. The goal of the creator of this course –Modern States Education Alliance, a non-profit organization– is to prepare you to pass the College Board's CLEP examination and obtain college credit for free.

CLEP indicates that questions on this exam require you to apply analytical techniques to hypothetical as well as real-world situations and to analyze and evaluate economic decisions.

You are expected to demonstrate an understanding of how free markets work and allocate resources efficiently. You should understand how individual consumers make economic decisions to maximize utility, and how individual firms make decisions to maximize profits.

As College Board indicates, you're also expected to identify the characteristics of the different market structures and analyze the behavior of firms in terms of price and output decisions. In addition, you should be able to evaluate the outcome in each market structure with respect to economic efficiency, identify cases in which private markets fail to allocate resources efficiently, and explain how government intervention fixes or fails to fix the resource allocation problem.

It is also important to understand the determination of wages and other input prices in factor markets, and analyze and evaluate the distribution of income.

This exam contains approximately 80 questions to be answered in 90 minutes.

The “Principles of Microeconomics” course is completely self-paced. There are no prerequisites to take this course, and it is entirely free.

This course is organized into seven topical chapters or modules that contain short video lessons, exercises and readings. 

2. About Helena Keefe

Helena Glebocki Keefe is Assistant Professor of Practice in the Economics Department at Fairfield University. She joined the department after completing her PhD at Fordham University, where she also taught Principles of Macroeconomics and Principles of Microeconomics for five years. She is passionate about teaching economics, and working with students that are new to economics.

Her area of expertise is in international economics, and she conducts research on emerging market economies, remittances, exchange rate markets, and central bank currency market intervention. She is also affiliated with the Center for International Policy Studies at Fordham University, working on research that facilitates international development from a multi-disciplinary perspective.

3. Required Knowledge and Skills

The CLEP exam requires you to demonstrate the following knowledge as indicated:

  • Understanding of important economic terms and concepts

  • Interpretation and manipulation of economic graphs

  • Interpretation and evaluation of economic data

  • Application of simple economic models

4. Course Modules

Following are the main topics and percentages of the exam’s questions, mostly based on the College Board's description of the course:

Module 1: Basic Economic Concepts (8%–14%)

  1.1 Scarcity, Limited Resources and Opportunity Cost

  1.2 Production Possibilities Curve

  1.3 Comparative Advantage, Specialization and Trade

  1.4 Economic Systems

1.4.1 Property Rights and the Role of Incentives

1.4.2 Marginal Analysis


Module 2: Supply and Demand 
(15%–20%)

  2.1 Market Equilibrium

2.1.1 Supply and Demand Model

2.1.2 Supply, Demand and Market Equilibrium

2.1.3 Market Equilibrium

  2.2. Elasticity

2.2.1 Price Elasticity of Demand and Supply

2.2.2 Price Elasticity of Demand and Supply

2.2.3 Price Elasticity of Demand and Supply

  2.3 Consumer Surplus, Producer Surplus and Market Efficiency

  2.4 Tax Incidence and Deadweight Loss


Module 3: Theory of Consumer Choice 
(5%–10%)

  3.1 Theory of Consumer Choice and Deriving the Demand Curve


Module 4: Production and Costs (10%–15%)

  4.1 Understanding Production Costs


Module 5: Firm Behavior and Market Structure (23%–33%)

  5.1 Profit

  5.2 Perfect Competition

  5.3. Monopoly

  5.4 Oligopoly

  5.5 Monopolistic Competition


Module 6: Factor Markets (8%–14%)

  6.1 Market for Inputs in Production


Module 7: Market Failure and the Role of Government (10%–16%)

  7.1 Externalities

  7.2 Public Goods

  7.3 Income Distribution

5. How CLEP Works

Developed by the College Board, CLEP (College-Level Examination Program®) is the most widely accepted credit-by-examination program.

CLEP’s credits are accepted by 2,900 colleges and universities, according to College Board. These tests assess college-level knowledge in 33 subject areas.

On average, a college course costs $700 while a CLEP exam costs $80.

Modern States Education Alliance is the non-profit organization behind these edX-style courses. Its project is called “Freshman Year for Free” and its mission is to make college more accessible and affordable through free, high-quality online education.

• CLEP® Principles of Microeconomics: at a Glance