ACDC Econ Summary Video - Microeconomics Overview

Introduction

• Host: Jacob Clifford
• Purpose: Review for AP or college introductory microeconomics
• Video aids in identifying areas needing more study
• Promotion of "Ultimate Review Pack"

Basic Economic Concepts

Scarcity and Opportunity Costs

• Scarcity: Unlimited wants, limited resources
• Opportunity Costs: Cost of foregone alternatives

Production Possibilities Curve (PPC)

• PPC Graph: Efficient, inefficient, and impossible points
• Constant Opportunity Cost: Straight line PPC
• Increasing Opportunity Cost: Bowed-out curve
• Shifts in PPC: More/less resources, technology, trade

Comparative Advantage

• Specialize in goods with lower opportunity cost
• Absolute Advantage: Higher production capacity
• Comparative Advantage: Calculations required
• Terms of Trade: Beneficial exchange rates

Economic Systems

• Free Market: Focus on capitalism
• Command Economy
• Mixed Economy
• Circular Flow Model: Businesses, individuals, government

Demand and Supply

Demand

• Law of Demand: Price increase leads to lower quantity demanded
• Demand Curve: Downward sloping
• Effects: Substitution, income, diminishing marginal utility

Supply

• Law of Supply: Price increase leads to higher quantity supplied
• Equilibrium: Intersection of demand and supply curves
• Shifts: Factors driving demand/supply changes

Elasticity

• Price Elasticity of Demand: Sensitivity of quantity to price changes
• Elastic vs Inelastic: Different consumer responses
• Coefficients: Calculation of elasticity
• Total Revenue Test: Assessing elasticity via revenue changes

Market Efficiency

• Consumer and Producer Surplus: Benefits to consumers/producers
• Deadweight Loss: Inefficiencies from price controls

Market Structures

Perfect Competition

• Characteristics: Many firms, identical products, low barriers
• Profit Maximization: Produce where MR = MC
• Efficiency: Productive and allocative efficiency

Monopoly

• Characteristics: Single firm, high barriers
• Price Maker: Downward sloping demand
• Regulation: Unregulated vs socially optimal production

Monopolistic Competition and Oligopoly

• Monopolistic Competition: Differentiated products, easy entry/exit
• Oligopoly: Few firms, strategic pricing, game theory

Resource Markets

Labor Market

• Supply and Demand: Firms demand, individuals supply
• Derived Demand: Labor demand depends on product demand
• Minimum Wage: Effects of wage floors

Marginal Analysis

• MRP and MRC: Marginal revenue and cost of resources
• Hiring Decisions: Where MRP = MRC

Market Failures

Public Goods

• Non-rivalry and Non-exclusion: Government provision

Externalities

• Negative Externalities: Additional costs to society
• Positive Externalities: Additional social benefits
• Corrective Measures: Taxes and subsidies

Income Distribution

• Lorenz Curve and Gini Coefficient: Measuring inequality
• Types of Taxes: Progressive, regressive, proportional

Conclusion

• Recommended review of key concepts
• Encouragement for exam preparation