APSN CFA 2013 Level 1 Study Session Economics Microeconomic Analysis

by Sam Gottlieb

This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. The first reading explains the concepts and tools of demand and supply analysis—the study of how buyers and sellers interact to determine transaction prices and quantities. The second reading covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions that maximize the satisfaction received from present and future consumption. The third reading deals with the theory of the firm, focusing on the supply of goods and services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms’ profit equation. The fourth and final reading completes the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for understanding how product and resource markets function and the competitive characteristics of different industries.

63 pages, Kindle Edition

First published October 2, 2012