Title 2023-L1V2.pdf ✅

ECONOMICS, FINANCIAL STATEMENT ANALYSIS CFA® Program Curriculum 2023 • LEVEL 1 • VOLUME 2 © CFA Institute. For candidate use only. Not for distribution.
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CONTENTS How to Use the CFA Program Curriculum xi Errata xi Designing Your Personal Study Program xi CFA Institute Learning Ecosystem (LES) xii Feedback xii Economics Learning Module 1 Topics in Demand and Supply Analysis 3 Introduction 3 Demand Concepts 4 Demand Concepts 4 Price Elasticity of Demand 6 Extremes of Price Elasticity 8 Predicting Demand Elasticity, Price Elasticity and Total Expenditure 9 Elasticity and Total Expenditure 11 Income Elasticity of Demand, Cross-Price Elasticity of Demand 12 Cross-Price Elasticity of Demand 13 Substitution and Income Effects; Normal Goods, Inferior Goods and Special Cases 15 Normal and Inferior Goods 17 Supply Analysis: Cost, Marginal Return, and Productivity 20 Marginal Returns and Productivity 20 Economc Profit Versus Accounting Profit 25 Economic Cost vs. Accounting Cost 25 Marginal Revenue, Marginal Cost and Profit Maximization; Short-Run Cost Curves: Total, Variable, Fixed, and Marginal Costs 26 Understanding the Interaction between Total, Variable, Fixed, and Marginal Cost and Output 28 Perfect and Imperfect Competition, Profit Maximization 32 Profit-Maximization, Breakeven, and Shutdown Points of Production 34 Breakeven Analysis and Shutdown Decision 35 The Shutdown Decision 36 Economies and Diseconomies of Scale with Short-Run and Long-Run Cost Analysis 40 Short- and Long-Run Cost Curves 41 Defining Economies of Scale and Diseconomies of Scale 42 Summary 45 Practice Problems 49 Solutions 57 Learning Module 2 The Firm and Market Structures 61 Introduction and Analysis of Market Structures 61 Analysis of Market Structures 62 Perfect Competition 67 indicates an optional segment © CFA Institute. For candidate use only. Not for distribution.
iv Contents Demand Analysis in Perfectly Competitive Markets 67 Elasticity of Demand 69 Other Factors Affecting Demand 71 Consumer Surplus: Value Minus Expenditure 73 Supply Analysis, Optimal Price, and Output in Perfectly Competitive Markets 76 Optimal Price and Output in Perfectly Competitive Markets 77 Long-Run Equilibrium In Perfectly Competitive Markets 81 Monopolistic Competition 84 Demand Analysis in Monopolistically Competitive Markets 85 Supply Analysis in Monopolistically Competitive Markets 86 Optimal Price and Output in Monopolistically Competitive Markets 86 Long-Run Equilibrium In Monopolistic Competition 87 Oligopoly and Pricing Strategies 88 Demand Analysis and Pricing Strategies in Oligopoly Markets 89 The Cournot Assumption 91 The Nash Equilibrium 94 Oligopoly Markets: Optimal Price, Output, and Long-Run Equilibrium 97 Optimal Price and Output in Oligopoly Markets 98 Factors Affecting Long-Run Equilibrium in Oligopoly Markets 98 Monopoly Markets: Demand/Supply and Optimal Price/Output 99 Demand Analysis in Monopoly Markets 101 Supply Analysis in Monopoly Markets 102 Optimal Price and Output in Monopoly Markets 103 Price Discrimination and Consumer Surplus 105 Monopoly Markets: Long-Run Equilibrium 107 Identification of Market Structure 108 Econometric Approaches 109 Simpler Measures 109 Summary 111 References 113 Practice Problems 114 Solutions 119 Learning Module 3 Aggregate Output, Prices, and Economic Growth 121 Introduction 122 Aggregate Output and Income 123 Gross Domestic Product 124 The Components of GDP 131 GDP, National Income, Personal Income, and Personal Disposable Income 135 Relationship among Saving, Investment, the Fiscal Balance and the Trade Balance 140 Aggregate Demand and Aggregate Supply 144 Aggregate Demand 144 Aggregate Supply 148 Shifts in the Aggregate Demand Curve 150 Equilibrium GDP and Prices 162 Economic Growth and Sustainability 173 The Production Function and Potential GDP 175 indicates an optional segment © CFA Institute. For candidate use only. Not for distribution.