How to use this guide
This guide follows the published description of ECON 201, Principles of Microeconomics (how a society chooses under scarcity, and how markets and other institutions decide what is produced and for whom), plus the standard topics of an introductory microeconomics course. Instructors' emphasis and notation vary: check your own course outline and use this guide to fill the gaps.
Topic order. Work the tabs left to right, the way a term usually runs. 01 and 02 build the toolkit: trade-offs, then supply and demand. 03 measures how strongly buyers and sellers react. 04 and 05 use that toolkit to judge markets: who gains, and what taxes, subsidies and price controls do. 06 to 09 look inside the firm: costs, then four market structures from perfect competition to oligopoly. 10 asks what to do when a market ignores side effects.
Inside each topic: read the idea, do each worked example on paper before opening the solution (they run simplest first), then break the lab by changing numbers. Finish with the Drill until you get several in a row right. All money is in Canadian dollars.
| Level | What it asks | Example |
|---|---|---|
| Beginner | One definition, or one formula in one step | What does a ride to campus really cost? Read a shortage off a table |
| Intermediate | A standard calculation with a few steps | Equilibrium from two equations; midpoint elasticity; consumer surplus |
| Exam level | A full exam-style question with several parts | A tax on sellers: new prices, quantity, revenue and deadweight loss |
| Hard | Twists: combining ideas, working backwards, traps | The tax that cuts quantity to a target; who gains from price discrimination |
The drill starts at Beginner and steps up a level after three correct answers in a row; you can also pick a level yourself. The written questions, multiple choice and flashcards are ordered easy → hard, so working through them in order builds each idea from the ground up.
The core formulas
- Opportunity cost of one more X = amount of Y given up ÷ amount of X gained
- Equilibrium: quantity demanded = quantity supplied; shortage = Qd − Qs, surplus = Qs − Qd
- Midpoint elasticity E = (ΔQ ÷ average Q) ÷ (ΔP ÷ average P)
- Consumer surplus = area under demand above price · producer surplus = area above supply below price
- Tax wedge = price buyers pay − price sellers keep · deadweight loss = ½ × wedge × lost quantity
- ATC = TC ÷ Q · AVC = VC ÷ Q · MC = ΔTC ÷ ΔQ · profit = TR − TC
- Competitive firm: produce where P = MC; shut down if P < min AVC
- Monopoly: produce where MR = MC, then read the price off demand
- HHI = sum of squared market shares (in percent)
Rules people forget: memorize
- A price change moves you along a curve; anything else shifts the curve
- Midpoint elasticity: divide by the average, never by the starting value
- Elasticity is a ratio: report its size, ignore the minus sign when classifying
- A price ceiling only matters if it is set below equilibrium (a floor: above)
- Who is legally taxed does not decide who bears the tax; elasticity does
- Fixed costs are sunk in the short run: they never enter the produce-or-shut-down decision
- Marginal cost cuts ATC and AVC at their minimums
- A monopolist's MR is below its price, so it charges more than MC
- Extra tax revenue does not cancel deadweight loss: they are different areas
Exam format, weight and allowed aids differ between sections and terms. Check your own course outline.
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