• Unit 2: Supply and Demand

    This unit will first introduce you to the ceteris paribus assumption, which is crucial to building correlations between economic variables. When using ceteris paribus, we assume that all variables - with the exception of those in explicit consideration - will remain constant. We will then examine the supply and demand models and the resulting market equilibrium that occurs where the supply curve and the demand curve intersect. We will also look at what causes movements along the curve and the set of factors that cause the curves to shift, affecting both price and quantity, before discussing the meaning and significance of elasticity.

    Next, we will take a look at what happens when a market fails to produce a reasonable equilibrium. This situation typically occurs when either the market is not competitive or complete, or its participants are ill-informed. We will evaluate various ways in which the government can address these failures and begin to understand the intricate relationship between government and economics.

    Completing this unit should take you approximately 18 hours.