theonline.mba
← Back to ECO 101

ECO 101 · Unit 3 of 6

Consumer and Firm Decisions

Microeconomics and Competitive Markets

Start unit · 5 lessons →

Learning objectives

After completing this unit, you will be able to:

  • Apply frameworks from \
  • Apply the frameworks in "Consumer and Firm Decisions" to a real management decision
  • Make progress on your Microeconomics and Competitive Markets portfolio artifact applied project

Why this matters

Consumer and Firm Decisions is essential to Microeconomics and Competitive Markets. Lessons build fluency with anchor-company examples, worked problems, and assessments on the unit page.

Lesson

Unit overview

Complete all 5 lessons in order. Each lesson follows the program authoring standard: conceptual prose, worked examples, practice problems, and managerial judgment prompts. Finish unit exercises and the knowledge check before marking the unit complete.

Connection to applied work

This unit feeds directly into Microeconomics and Competitive Markets portfolio artifact. As you read, capture notes, examples, and data you can reuse in that deliverable. Strong students finish each unit with a draft section of their project, not just highlights.

Practice

  1. Write a one-page summary of this unit in your own words without looking at the lesson.
  2. Find a real company example (public filing, news article, or personal experience) that illustrates the main concept.
  3. Draft one paragraph recommending an action a manager should take based on this unit.
  4. Add at least three terms from this unit to your course glossary.

Knowledge check

Answer these without notes before marking the unit complete:

  1. What is the central idea of "Consumer and Firm Decisions"?
  2. What mistake do beginners most often make when applying this material?
  3. How does this unit help you complete Microeconomics and Competitive Markets portfolio artifact?
  4. What is one decision you face this month where this unit applies?

Key takeaways

  • Apply frameworks from \
  • Business concepts only matter when they change a decision.
  • Your ECO 101 assessment (Demand, supply, elasticity, market structure, and strategic microeconomic reasoning.) rewards applied understanding, not memorization.

Unit assessment

Complete each section below. Score 80%+ on the quiz to finish this unit's assessment.

40% applied project35% knowledge checks25% reflections

Exercises

Apply what you learned in this unit with structured practice.

ExerciseApplied practice: Consumer and Firm Decisions45 min
Complete a focused practice exercise on **Consumer and Firm Decisions**. 1. Choose a real company, product, or situation you know. 2. Apply one core framework from this unit to analyze it. 3. Write your analysis in 300–500 words with a clear recommendation. 4. Cite at least one credible source.

Deliverable

300–500 word analysis document saved to your portfolio under ECO 101.

Rubric

  • • Framework applied correctly (not just named)
  • • Specific evidence from a real example
  • • Clear recommendation with tradeoffs acknowledged
  • • Professional writing with source citation
ExerciseDrill: Consumer and Firm Decisions30 min
Work through the practice problems in the unit lesson without looking at notes. Then check your work against the lesson and write a short reflection: - What you got right - One mistake you caught - One concept to review before the next unit

Deliverable

Problem solutions + 150-word reflection in your ECO 101 workbook.

Rubric

  • • Attempted all practice items before checking answers
  • • Honest reflection on errors
  • • Identifies a specific review action

Case analysis

Analyze a case using frameworks from this unit.

CaseCase analysis: Consumer and Firm Decisions60 min
Analyze a real business case through the lens of **Consumer and Firm Decisions**. Choose a public company event, HBR-style case, or documented decision. **Deliverable structure:** 1. Situation summary (150 words) 2. Analysis using this unit's frameworks (400 words) 3. Recommendation (150 words) 4. Risks and what would change your mind

Deliverable

2-page case write-up in your portfolio.

Rubric

  • • Case facts are accurate and sourced
  • • Analysis uses unit frameworks explicitly
  • • Recommendation is justified with tradeoffs
  • • Risks are specific, not generic

Knowledge quiz

Check your understanding before marking the unit complete.

1. ClearPeak designs time-of-use tiers. A household values evening cooling highly and afternoon laundry low. Which consumer choice idea explains why identical bundles suit customers poorly?

2. ClearPeak can spend $2M more on targeted demand response or accept higher peaker runs costing $2.1M variable. Elena applies marginal analysis. What decision rule is correct?

3. A solar farm adds output with each MW installed but eventually faces siting and interconnection limits. Which production function feature is Amara modeling?

4. Short run, ClearPeak cannot retire a coal unit mid-summer. Long run, it can add 1,800 MW solar. Which cost statement fits?

5. Combining customer billing, grid operations, and renewable procurement under one IT platform reduces duplicate staff. ClearPeak cites economies of scope. What does scope mean here?

6. Dispatch avoids 700 MW of peaker at $0.067/kWh for one peak hour. Approximate variable cost savings at peaker marginal cost?

7. Tom Bradley argues for average embedded coal cost in a peak pricing filing. Elena counters with $0.067/kWh peaker marginal cost. What mistake is Tom making?

8. Practice Problem 2 at $40M scale with 9% driver change yields base impact near $4M before adjustments. If reconciliation fails by $50K, what should happen per lesson discipline?

Next unit: Market Structures →