CLEP 
Principles of Microeconomics
College · CLEP Principles of Microeconomics · Certificate available
458 lessons 5.2h runtime 17 units 847 links between lessons Test yourself · 17 quizzes, a mid exam, and a final
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Begin with Unit 1: Economics, Scarcity, and Choice. It sets the foundation for everything that follows.
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Unit 1: Economics, Scarcity, and Choice 32 lessons, 2 lecture parts
- 0001 What Economics Studies
- 0002 Scarcity and the Three Questions
- 0003 Opportunity Cost
- 0004 Division of Labor and Specialization
- 0005 Three Reasons Specialization Raises Output
- 0006 Specialization Needs Markets
- 0007 Factors of Production
- 0008 Microeconomics Against Macroeconomics
- 0009 Theories, Models and Ceteris Paribus
- 0010 The Circular Flow: Product and Factor Markets
- 0011 Which Market Is It? worked example
- 0012 Three Ways to Organize an Economy
- 0013 Property Rights
- 0014 Incentives
- 0015 Placing an Economy on the Spectrum worked example
- 0016 Globalization, Exports and Imports
- 0017 The Budget Constraint
- 0018 Opportunity Cost from Two Prices worked example
- 0019 Marginal Analysis
- 0020 Diminishing Marginal Utility
- 0021 Sunk Costs
- 0022 How Many: Marginal Benefit Against Marginal Cost worked example
- 0023 The Production Possibilities Frontier
- 0024 Why the Frontier Bows Outward
- 0025 Productive and Allocative Efficiency
- 0026 Growth Shifts the Frontier
- 0027 On, Inside or Outside the Frontier worked example
- 0028 Absolute and Comparative Advantage
- 0029 Comparative Advantage from a Table worked example
- 0030 Positive or Normative worked example
- 0031 Reading a Straight Line worked example
- 0032 Where Opportunity Cost Keeps Turning Up review
Unit 2: Demand and Supply 42 lessons, 2 lecture parts
- 0101 What a Market Is
- 0102 Demand and Quantity Demanded
- 0103 The Law of Demand
- 0104 Supply and Quantity Supplied
- 0105 The Law of Supply
- 0106 Equilibrium
- 0107 Surplus and Shortage
- 0108 Finding Equilibrium from a Schedule worked example
- 0109 Solving a Market with Algebra worked example
- 0110 Shift Versus Movement Along
- 0111 Income: Normal and Inferior Goods
- 0112 Substitutes and Complements
- 0113 Tastes, Population and Buyer Expectations
- 0114 What Shifts Supply
- 0115 Seller Expectations and the Number of Sellers
- 0116 The Four-Step Process
- 0117 Which Curve Shifts, and Which Way worked example
- 0118 A Related Good's Price Changes worked example
- 0119 When Both Curves Shift worked example
- 0120 A Shift in One Curve Moves Along the Other
- 0121 Price Controls
- 0122 Price Ceilings
- 0123 Price Floors
- 0124 Binding or Not worked example
- 0125 Rent Control
- 0126 Agricultural Price Supports
- 0127 The Minimum Wage as a Floor
- 0128 Consumer Surplus
- 0129 Producer Surplus
- 0130 Social Surplus and Efficiency
- 0131 Computing Surplus from Linear Curves worked example
- 0132 Deadweight Loss
- 0133 Transfer or Deadweight Loss
- 0134 Deadweight Loss from a Ceiling worked example
- 0135 Deadweight Loss from a Floor worked example
- 0136 Who Gains and Who Loses from a Control worked example
- 0137 Prices Carry Information
- 0138 Demand as Marginal Benefit, Supply as Marginal Cost
- 0139 The Efficiency Condition
- 0140 Efficiency Is Not Equity
- 0141 Why a Binding Ceiling Can Leave Buyers Worse Off review
- 0142 The Drought Chain: Which Curve Moves, Which Does Not review
Unit 3: Labor and Financial Markets 20 lessons, 1 lecture part
Lecture: Watch · 33:16
- 0201 One Model, Three Markets
- 0202 The Wage Is the Price of Labor
- 0203 Labor Demand Is Derived Demand
- 0204 What Shifts Labor Demand
- 0205 Technology: Substitute or Complement
- 0206 What Shifts Labor Supply
- 0207 Work, Leisure and the Backward Bend
- 0208 Finding the Equilibrium Wage from a Schedule worked example
- 0209 Which Labor Curve Shifts, and Which Way worked example
- 0210 Minimum Wage and Living Wage
- 0211 Is the Minimum Wage Binding? worked example
- 0212 The Employment Effect: What the Evidence Says
- 0213 Technology and the Wage Gap
- 0214 Savers and Borrowers
- 0215 The Interest Rate Is the Price of Capital
- 0216 What Shifts Saving and Borrowing
- 0217 Saving and the Interest Rate: Two Effects
- 0218 A Credit Market: Shift and Usury Cap worked example
- 0219 Prices Carry Information in Three Markets
- 0220 One Model, Three Markets, Worked review
Unit 4: Elasticity 30 lessons, 2 lecture parts
- 0301 Elasticity Measures Responsiveness
- 0302 Price Elasticity of Demand
- 0303 The Midpoint Method
- 0304 Computing a Price Elasticity of Demand worked example
- 0305 Elastic, Inelastic and Unitary
- 0306 Elasticity Is Not Slope
- 0307 Elasticity Along a Straight-Line Demand Curve
- 0308 Reading Elasticity off a Line worked example
- 0309 Perfectly Elastic and Perfectly Inelastic
- 0310 Constant Unitary Elasticity
- 0311 What Makes Demand Elastic
- 0312 Short Run Against Long Run
- 0313 Total Revenue
- 0314 The Total Revenue Test worked example
- 0315 Passing a Cost Change Through worked example
- 0316 Price Elasticity of Supply
- 0317 Computing a Price Elasticity of Supply worked example
- 0318 Time and the Elasticity of Supply
- 0319 Income Elasticity of Demand
- 0320 Cross-Price Elasticity of Demand
- 0321 Classifying Goods by the Sign worked example
- 0322 A Tax Drives a Wedge
- 0323 Tax Incidence: Who Bears the Burden
- 0324 Splitting the Burden worked example
- 0325 Tax Revenue and Elasticity
- 0326 The Deadweight Loss of a Tax
- 0327 Computing a Tax's Deadweight Loss worked example
- 0328 Buyer's Tax or Seller's Tax: Same Result worked example
- 0329 Elasticity of Labor Supply and of Saving
- 0330 One Excise Tax, Fully Worked review
Unit 5: Consumer Choices 26 lessons, 2 lecture parts
- 0401 What Consumer Theory Explains
- 0402 Total Utility and Marginal Utility
- 0403 Computing Marginal Utility from a Table worked example
- 0404 Utility Is Not Comparable Across People
- 0405 Marginal Utility per Dollar
- 0406 The Utility-Maximizing Rule
- 0407 Finding the Best Bundle worked example
- 0408 Is the Consumer at Equilibrium? worked example
- 0409 An Income Change Shifts the Budget Line
- 0410 Reading an Income Change worked example
- 0411 A Price Change Rotates the Budget Line
- 0412 The Substitution Effect
- 0413 The Income Effect
- 0414 Substitution or Income? worked example
- 0415 Normal, Inferior and the Two Effects
- 0416 From Utility to the Individual Demand Curve
- 0417 Deriving Three Points of a Demand Curve worked example
- 0418 Market Demand Is the Horizontal Sum
- 0419 Summing Individual Demands worked example
- 0420 Indifference Curves
- 0421 The Marginal Rate of Substitution
- 0422 The Tangency Rule
- 0423 Decomposing a Price Change on the Diagram
- 0424 Loss Aversion and Framing
- 0425 Mental Accounting and Commitment Devices
- 0426 From Utils to a Demand Curve review
Unit 6: Production, Costs, and Industry Structure 42 lessons, 2 lecture parts
- 0501 The Firm and Its Decisions
- 0502 The Spectrum of Competition
- 0503 Explicit and Implicit Costs
- 0504 Accounting Profit and Economic Profit
- 0505 Normal Profit
- 0506 Computing Economic Profit worked example
- 0507 The Production Function
- 0508 Fixed and Variable Inputs; Short Run and Long Run
- 0509 Total Product and Marginal Product
- 0510 Diminishing Marginal Product
- 0511 Building a Marginal Product Column worked example
- 0512 Average Product and the Marginal Rule
- 0513 Fixed Cost, Variable Cost, Total Cost
- 0514 From a Production Table to a Cost Table worked example
- 0515 Average Cost: Total, Variable, Fixed
- 0516 Marginal Cost
- 0517 Computing Marginal Cost from Variable Cost worked example
- 0518 Why Marginal Cost Rises: Wage over Marginal Product
- 0519 Marginal Cost from Marginal Product worked example
- 0520 The Shape of Average Cost
- 0521 Marginal Crosses Average at the Minimum
- 0522 Reading the Cost Family worked example
- 0523 Average Fixed Cost Falls Forever
- 0524 Building the Whole Cost Table worked example
- 0525 Sunk Fixed Costs
- 0526 Cost Patterns Differ Across Industries
- 0527 Profit Margin: Price Against Average Cost
- 0528 Production in the Long Run
- 0529 More Capital Delays Diminishing Returns
- 0530 Choosing a Technology
- 0531 Least-Cost Technology from Three Bundles worked example
- 0532 The Cost-Minimizing Input Rule
- 0533 Applying the Input Rule worked example
- 0534 Long-Run Average Cost
- 0535 Economies of Scale
- 0536 Constant Returns and Diseconomies of Scale
- 0537 Diminishing Returns Are Not Diseconomies
- 0538 Reading a Long-Run Average Cost Curve worked example
- 0539 Minimum Efficient Scale and the Number of Firms
- 0540 Technology Shifts the Scale
- 0541 From a Production Function to Every Cost Curve review
- 0542 Why Industries Differ in Firm Size review
Unit 7: Perfect Competition 40 lessons, 2 lecture parts
- 0601 The Price Taker
- 0602 Four Conditions of Perfect Competition
- 0603 The Firm's Demand Curve Is Flat
- 0604 Marginal Revenue Equals Price
- 0605 Total Revenue Against Total Cost
- 0606 Profit by Totals from a Table worked example
- 0607 The Marginal Rule: MR = MC
- 0608 Profit-Maximizing Quantity from a Cost Table worked example
- 0609 Which Crossing Counts
- 0610 Reading Profit Against Average Total Cost
- 0611 Profit, Break-Even or Loss worked example
- 0612 The Break-Even Point
- 0613 Operating at a Loss
- 0614 The Shutdown Rule
- 0615 The Shutdown Test worked example
- 0616 The Shutdown Point
- 0617 Three Zones of the Marginal Cost Curve
- 0618 Locating Break-Even and Shutdown on a Table worked example
- 0619 The Firm's Short-Run Supply Curve
- 0620 Market Supply Is the Sum of Marginal Costs
- 0621 Cost Shifters Are Supply Shifters
- 0622 Shutting Down Is Not Exiting
- 0623 Entry and Exit
- 0624 How Entry Drives Profit to Zero
- 0625 Long-Run Equilibrium: P = MC = Minimum ATC
- 0626 Tracing a Demand Increase to the Long Run worked example
- 0627 Tracing a Demand Decrease worked example
- 0628 A Cost Change in the Short and Long Run
- 0629 A Fixed-Cost Change
- 0630 Constant-Cost Industry
- 0631 Increasing- and Decreasing-Cost Industries
- 0632 Classifying the Industry and Its Long-Run Supply worked example
- 0633 Constant Cost Is Not Constant Returns
- 0634 Productive Efficiency in Competition
- 0635 Allocative Efficiency: P = MC
- 0636 Testing Efficiency at a Quantity worked example
- 0637 What Efficiency Does Not Mean
- 0638 Competition as the Benchmark
- 0639 One Price-Taking Firm from a Price Cut to Exit review
- 0640 Why Price Equals Marginal Cost Is the Efficiency Condition review
Unit 8: Monopoly 30 lessons, 2 lecture parts
- 0701 Monopoly and Market Power
- 0702 Barriers to Entry
- 0703 Natural Monopoly
- 0704 Control of a Resource; Legal Monopoly
- 0705 Intellectual Property
- 0706 Predatory Pricing and Other Intimidation
- 0707 Classifying a Barrier worked example
- 0708 Is It a Natural Monopoly? worked example
- 0709 The Monopolist's Demand Curve Is the Market's
- 0710 What Defines the Market
- 0711 Total Revenue Rises Then Falls
- 0712 Marginal Revenue Below Price
- 0713 Building a Marginal Revenue Column worked example
- 0714 The Twice-as-Steep Rule
- 0715 Marginal Revenue and Elasticity
- 0716 Profit Maximization: MR = MC, Then Price from Demand
- 0717 Finding the Monopolist's Quantity, Price and Profit worked example
- 0718 Three Myths About Monopoly
- 0719 Monopoly Against Competition on the Same Curves
- 0720 The Output Shortfall worked example
- 0721 The Inefficiency of Monopoly
- 0722 The Deadweight Loss of Monopoly
- 0723 Computing the Deadweight Loss worked example
- 0724 The Transfer to the Monopolist
- 0725 Price Discrimination
- 0726 Three Conditions for Price Discrimination
- 0727 Which Group Pays More worked example
- 0728 Innovation and the Quiet Life
- 0729 Monopoly Power Is Fragile
- 0730 The Same Market, Run Twice review
Unit 9: Monopolistic Competition and Oligopoly 34 lessons, 2 lecture parts
- 0801 Between the Poles: Imperfect Competition
- 0802 Monopolistic Competition Defined
- 0803 Four Sources of Differentiation
- 0804 The Perceived Demand Curve
- 0805 Profit Maximization in the Short Run
- 0806 A Monopolistic Competitor's Quantity, Price and Profit worked example
- 0807 Entry Shifts the Firm's Demand Left
- 0808 Long-Run Equilibrium: The Tangency
- 0809 Tracing Entry to the Tangency worked example
- 0810 Excess Capacity
- 0811 The Efficiency Verdict
- 0812 Variety: The Benefit
- 0813 Advertising in the Model
- 0814 Advertising: Two Views
- 0815 Oligopoly Defined
- 0816 Why Oligopolies Exist
- 0817 Measuring Concentration: The Four-Firm Ratio
- 0818 The Herfindahl-Hirschman Index
- 0819 Computing Both Measures worked example
- 0820 Interdependence
- 0821 Collusion and Cartels
- 0822 The Cartel's Temptation
- 0823 Game Theory and Payoffs
- 0824 The Prisoner's Dilemma
- 0825 Dominant Strategy
- 0826 Nash Equilibrium
- 0827 Reading a Payoff Matrix worked example
- 0828 The Duopoly Game worked example
- 0829 A Game Without a Dominant Strategy worked example
- 0830 Repeated Games: Tit-for-Tat and Triggers
- 0831 The Kinked Demand Curve
- 0832 Classifying a Market Structure worked example
- 0833 The Four Structures on One Table review
- 0834 Why the Cartel Breaks review
Unit 10: Antitrust and Regulation 12 lessons, 1 lecture part
Lecture: Watch · 26:07
- 0901 Antitrust Law: The Statutes
- 0902 Mergers and Acquisitions
- 0903 Measuring a Merger worked example
- 0904 The Agencies' Thresholds, Dated
- 0905 Market Definition and Actual Competition
- 0906 Collusion and Restrictive Practices
- 0907 Classifying a Practice worked example
- 0908 Regulating a Natural Monopoly: Four Options
- 0909 Regulating a Natural Monopoly: The Numbers worked example
- 0910 Cost-Plus Against Price-Cap Regulation
- 0911 Deregulation and Regulatory Capture
- 0912 One Merger, Start to Finish review
Unit 11: Externalities and the Environment 14 lessons, 1 lecture part
Lecture: Watch · 32:49
- 1001 Externalities
- 1002 Private Cost, External Cost, Social Cost
- 1003 Marginal Private Cost and Marginal Social Cost
- 1004 The Negative-Externality Market worked example
- 1005 Market Failure
- 1006 Command-and-Control Regulation
- 1007 A Pollution Charge
- 1008 The Abatement Decision Under a Tax worked example
- 1009 Marketable Permits
- 1010 Who Sells and Who Buys Permits worked example
- 1011 Property Rights and the Coase Theorem
- 1012 The Efficient Level of Pollution
- 1013 One Polluting Market, Three Remedies review
- 1014 Coase's Field and Railroad review
Unit 12: Positive Externalities and Public Goods 18 lessons, 1 lecture part
Lecture: Watch · 35:05
- 1101 Positive Externalities
- 1102 Marginal Private Benefit and Marginal Social Benefit
- 1103 The Positive-Externality Market and the Subsidy worked example
- 1104 Why Competition Can Discourage Innovation
- 1105 Private Return and Social Return
- 1106 Intellectual Property
- 1107 Funding, Tax Credits and Cooperative Research
- 1108 Which Remedy Fits worked example
- 1109 Public Goods: Nonexcludable and Non-Rival
- 1110 What a Public Good Is Not
- 1111 Classifying Goods by Excludability and Rivalry worked example
- 1112 The Free-Rider Problem
- 1113 The Free-Rider Matrix worked example
- 1114 Provision of Public Goods
- 1115 Common Resources and the Tragedy of the Commons
- 1116 Remedies for the Commons
- 1117 One Public Good: Why the Market Fails and Three Ways to Pay review
- 1118 The Commons: One Fishery review
Unit 13: Labor Markets 26 lessons, 2 lecture parts
- 1201 Income Comes from Factor Markets
- 1202 Why Firms Demand Labor
- 1203 Value of the Marginal Product
- 1204 Marginal Revenue Product
- 1205 Building Marginal Revenue Product and Hiring worked example
- 1206 Marginal Factor Cost in a Competitive Labor Market
- 1207 The Hiring Rule and the Demand for Labor
- 1208 The Two Rules Lead to the Same Outcome worked example
- 1209 Derived Demand and Shifts in Labor Demand
- 1210 Hiring Under Imperfect Competition
- 1211 Marginal Revenue Product with a Downward-Sloping Product Demand worked example
- 1212 The Market Wage
- 1213 The Supply of Labor
- 1214 Shifts in Labor Supply
- 1215 Predicting Wage and Employment from a Shift worked example
- 1216 Monopsony
- 1217 Marginal Factor Cost Above the Wage
- 1218 The Monopsony Outcome worked example
- 1219 A Minimum Wage: Competition Against Monopsony
- 1220 Unions and the Union Wage
- 1221 The Union Wage in a Competitive Market worked example
- 1222 Productivity, Substitution and Membership
- 1223 Bilateral Monopoly
- 1224 Employment Discrimination
- 1225 Is It Discrimination? worked example
- 1226 One Labor Market Four Ways review
Unit 14: Poverty and Income Inequality 12 lessons, 1 lecture part
Lecture: Watch · 26:40
- 1301 Poverty and Inequality: Two Questions
- 1302 The Poverty Line
- 1303 Poverty Line Arithmetic worked example
- 1304 The Poverty Trap
- 1305 The Poverty Trap in Numbers worked example
- 1306 The Safety Net's Designs
- 1307 Quintiles and the Lorenz Curve
- 1308 Drawing Two Lorenz Curves worked example
- 1309 The Gini Coefficient
- 1310 Sources of Rising Inequality
- 1311 Tools and the Trade-off
- 1312 One Distribution, End to End review
Unit 15: Information, Insurance, and Financial Markets 16 lessons, 1 lecture part
Lecture: Watch · 33:42
- 1401 Imperfect and Asymmetric Information
- 1402 Price as a Signal of Quality
- 1403 Bridging the Gap
- 1404 Which Mechanism Fits worked example
- 1405 Insurance, Pools and Risk Groups
- 1406 Pooled and Fair Premiums worked example
- 1407 Moral Hazard
- 1408 Adverse Selection
- 1409 The Adverse-Selection Spiral worked example
- 1410 Third-Party Payers
- 1411 How Firms Raise Financial Capital
- 1412 Debt, Equity, and the Three Characteristics
- 1413 Interest and Present Value
- 1414 Pricing a Bond When Rates Move worked example
- 1415 The Investment Rule and the Demand for Capital worked example
- 1416 The Interest Rate as a Price review
Unit 16: International Trade and Trade Policy 24 lessons, 2 lecture parts
- 1501 Trade as Mutual Gain
- 1502 Absolute Advantage
- 1503 Comparative Advantage
- 1504 Reading a Productivity Table worked example
- 1505 The Reciprocal Rule
- 1506 The Straight-Line Frontier and Consuming Beyond It
- 1507 The Terms of Trade and the Gain worked example
- 1508 Intra-Industry Trade
- 1509 What the Gains from Trade Are Worth
- 1510 Three Forms of Protection
- 1511 Two Countries, One Good worked example
- 1512 Who Gains and Who Loses from Trade
- 1513 A Tariff's Geometry worked example
- 1514 Tariff Against Quota worked example
- 1515 Protection as a Subsidy
- 1516 Does Protection Create Jobs?
- 1517 Wages, Distribution and Standards
- 1518 The Infant-Industry Argument
- 1519 Anti-Dumping
- 1520 Environment, Safety and National Interest
- 1521 How Trade Policy Is Made
- 1522 Classifying an Argument for Protection worked example
- 1523 Does Protection Save Jobs? review
- 1524 The Technotron Argument review
Unit 17: Capstone: The Course in Forty Views 40 lessons, 2 lecture parts
- 1601 Scarcity, Choice and the Margin
- 1602 The Frontier
- 1603 Advantage and Trade, Restated
- 1604 Positive, Normative, and What This Course Claims
- 1605 Sample Question One: Inside the Frontier worked example
- 1606 Demand, Supply, and the Four Steps
- 1607 The Shifters
- 1608 Equilibrium, Surplus, Shortage, Both Curves
- 1609 Sample Question Two: A Substitute's Price Falls worked example
- 1610 Elasticity, Restated
- 1611 Price Controls and the Loss
- 1612 Who Bears It: Elasticity Decides review
- 1613 Sample Question Three: Income or Substitution worked example
- 1614 One Rule, Two Languages
- 1615 From Utility to Market Demand
- 1616 Profit, Three Ways
- 1617 Sample Question Four: The Cost-Minimizing Combination worked example
- 1618 Diminishing Returns and Rising Marginal Cost
- 1619 The Cost Family
- 1620 The Long Run: Scale
- 1621 The Price Taker and the Marginal Rule
- 1622 Sample Question Eight: Quantity from a Total-Cost Table worked example
- 1623 Sample Question Five: The Shutdown Test worked example
- 1624 Supply, Entry and Exit
- 1625 Long-Run Industry Supply
- 1626 Efficiency in Competition
- 1627 Monopoly, Restated
- 1628 Price Discrimination, Restated
- 1629 Monopolistic Competition, Restated
- 1630 Oligopoly and Games, Restated
- 1631 One Rule, Seven Decisions review
- 1632 Sample Question Six: Marginal Factor Cost worked example
- 1633 Derived Demand and the Hiring Rule
- 1634 Power in the Labor Market
- 1635 Capital and Interest, Restated
- 1636 Sample Question Seven: A Negative Externality worked example
- 1637 Public Goods and the Positive Case
- 1638 Government's Other Tasks, Restated
- 1639 One Triangle, Six Wedges review
- 1640 What This Course Rests On review
Who this subject is for
- Students preparing for the CLEP Principles of Microeconomics exam
- Business and economics majors
- Health administration and public policy students
- Adult learners finishing a degree
- Homeschool students
- Anyone who wants to understand prices, markets and choices
Why Principles of Microeconomics matters
Microeconomics explains how people and firms make choices when resources are limited. It is the foundation for:
- Intermediate economics
- Managerial economics
- Finance
- Marketing
- Public policy
Time to complete
- of lessons (458, measured)
- 5.2 h
- of lectures (28)
- 13.7 h
- learning hours on the certificate, with quizzes and the final
- 25.5 h
Times are measured from the recordings and the exam time limits. Go at your own pace; nothing expires.
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