ECC1000 Principles of microeconomics
The Complete Exam Bible · S2 2026ECC1000 Overview
- Monash University
- Semester 2 2026
- First-year microeconomics
- Invigilated on-campus final examination
- CORE Econ open textbook
Principles of microeconomics teaches one habit: name what is held constant, then say what follows
ECC1000 Principles of microeconomics is Monash University's first-year introduction to microeconomic reasoning.
- Assessed by Exercises and in-semester quizzes and tests, then an invigilated final examination worth half the unit.
- Hardest step Naming what is held constant before describing any movement on a diagram.
- How to prepare Rebuild each diagram from its assumptions, then write the verdict sentence it supports.
- Where to confirm Weights, dates and any hurdle requirement live on the unit's Moodle site and in the Monash Handbook.
How ECC1000 is assessed
| Component | Weight | Format |
|---|---|---|
| Exercise | 20% | Pre-workshop preparation at 2% each, individual, best 5 of 9; plus workshop exercises at 2% each, completed in groups during the workshop, best 5 of 9. Workshop exercises are marked against a published three-criterion rubric. |
| Quiz / Test | 30% | Post-workshop quizzes at 5% each, best 2 of 3; plus in-class tests at 20% each, best 1 of 2, held in the week 5 and week 9 workshops. The tests are supervised and sat in person on paper, with no notes beyond a single A4 sheet written on both sides, plus a calculator. |
| Examination | 50% | Held on campus and invigilated during the examination period, delivered through the University's electronic assessment platform. It covers the readings, the pre-workshop material and the workshops for every week. The date is to be advised. |
What ECC1000 covers
Principles of microeconomics builds the toolkit the rest of the unit runs on: opportunity cost, the production possibilities frontier, the budget line, the indifference curve and the payoff grid. Each chapter below covers one block of teaching and ends in the verdict its model is marked against.
Economic Models, Opportunity Cost and Gains from Trade
Week 1, CORE Units 1 and 2. The six principles, what a model is for, the production possibilities frontier and its three verdicts, constant and increasing opportunity cost, absolute against comparative advantage, and the range of terms two producers will trade at.02Costs, Economic Profit and Decisions at the Margin
Week 2, CORE Unit 3 part A, firm side. Either-or against how-much decisions, explicit and implicit cost, accounting against economic profit, the implicit cost of owned capital, the marginal stopping rule, sunk costs, and the behavioural departures the unit names.03Utility, Budget Lines and Optimal Consumption
Week 2, CORE Unit 3 part A, consumer side. Utility and the util, the consumption bundle and the utility function, diminishing marginal utility, the budget constraint against the budget line, what shifts and what pivots it, and the equal marginal utility per dollar rule.04Indifference Curves, Preferences and the Consumer Optimum
Week 3, CORE Unit 3 part B. The marginal rate of transformation and the marginal rate of substitution, kinked budget constraints, diminishing marginal rate of substitution, the five preference properties and what each one buys the diagram, and the tangency condition.05Price Changes, Income Effects and the Work-Leisure Choice
Week 3, CORE Unit 3 part B. Decomposing a price change into a substitution effect and an income effect in a fixed order, which direction each effect is guaranteed to take, normal against inferior goods, and the consumption-leisure model in which the wage is the slope.06Strategic Interaction, Nash Equilibrium and Social Dilemmas
Week 4, CORE Unit 4. The five elements of a game, best responses and the two-pass scan, dominant and dominated strategies, Pareto efficiency, the prisoner's dilemma, coordination games with and without a dominant equilibrium, and free riding on a public good.The unit opens with what economic models are for and why they repay the effort, moves to consumer behaviour and the interactions between consumers, then turns to firms, production and market structure, closing on consumption and saving, inequality and market failure.
It is taught on the free CORE Econ text The Economy 2.0: Microeconomics, and the unit states plainly that you are examined on that text together with the pre-workshop lecture videos and the workshops.
Two of the published learning outcomes shape almost every question. One asks you to apply economic concepts to how individuals, firms and governments decide in competitive and non-competitive settings.
The other asks for graphs and numbers used together, to judge how resources end up allocated and how prices respond to shocks and to policy.
In practice that means a diagram and a sentence, marked together: the diagram fixes what is held constant, and the sentence states the conclusion that assumption earns.
What the early weeks install, and why everything later depends on them
The first block of teaching is the toolkit.
Week 1 sets out the six principles the unit reasons with and two models built from them, the production possibilities frontier and comparative advantage. Week 2 splits decisions into either-or and how-much, separates explicit from implicit cost, and introduces utility and the budget line.
Week 3 rebuilds consumer choice with indifference curves, decomposes a price change into a substitution effect and an income effect, and applies the whole apparatus to the choice between work and free time.
Week 4 changes the problem: your best move now depends on someone else's, and game theory supplies best responses, Nash equilibrium and the social dilemmas that follow.
The vocabulary that separates a pass answer from a strong one
Microeconomics penalises loose words heavily. Efficient, inefficient and infeasible are three different findings about a point on a diagram.
Absolute advantage and comparative advantage answer different questions, and only the second decides who specialises. Accounting profit and economic profit differ by exactly the implicit costs, so quoting the wrong one is a different conclusion rather than a rounding error. A substitution effect and an income effect have different causes and, after a price rise, only the first has a guaranteed direction.
An equilibrium is a prediction about where behaviour settles and says nothing on its own about whether the outcome is any good.
How the unit is assessed, in one paragraph
Assessment is grouped in three published components: exercises worth 20 per cent, quizzes and tests worth 30 per cent, and a final examination worth 50 per cent.
The in-semester parts each count only your best attempts, and the University states the consequence explicitly: because every in-semester component runs on a best-of policy, special consideration is not granted for individual missed tasks. The in-class tests are supervised, sat in person on paper, with no notes beyond a single A4 sheet written on both sides, plus a calculator.
The final examination is held on campus during the examination period, is invigilated, and runs on the University's electronic assessment platform; its date is to be advised.
Who should specialise, and at what terms
- 1Compare maximum outputs to settle absolute advantage.
- 2Convert each region's frontier into an opportunity cost per panel and per tonne.
- 1State who specialises and bound the acceptable terms of trade from both sides.
Key terms
- Opportunity cost
- The value of the next best alternative given up in order to take an action.
- Production possibilities frontier
- The line showing every output combination a fixed pool of resources can just produce.
- Comparative advantage
- Holding the lower opportunity cost of producing a good than the other producer does.
- Economic profit
- Revenue less explicit costs and less the implicit value of the forgone alternative.
- Sunk cost
- A cost already incurred that cannot be recovered, and therefore excluded from a forward-looking decision.
- Marginal utility
- The change in total utility produced by consuming one more unit of a good.
- Budget line
- The set of bundles whose total expenditure exactly exhausts the consumer's income.
- Marginal rate of substitution
- The quantity of one good a consumer will surrender for one more unit of another at constant utility.
- Marginal rate of transformation
- The rate at which the market converts one good into the other, equal to the price ratio.
- Substitution effect
- The change in consumption caused by a change in relative prices with utility held constant.
- Income effect
- The change in consumption caused by a change in real purchasing power with relative prices held constant.
- Nash equilibrium
- A combination of actions in which no player can raise their own payoff by changing only their own action.
- Pareto efficiency
- A property of an outcome that cannot be improved for one participant without worsening another.
ECC1000 FAQ
How is this Monash microeconomics unit assessed?
Assessment is published in three components. Exercises carry 20 per cent, made up of pre-workshop preparation and in-workshop group exercises at 2 per cent each, with the best five of nine counting in each part. Quizzes and tests carry 30 per cent, from post-workshop quizzes at 5 per cent each, best two of three, plus in-class tests at 20 per cent each, best one of two, held in the week 5 and week 9 workshops.
The final examination carries the remaining 50 per cent.
Which textbook does the unit run on?
Teaching follows The Economy 2.0: Microeconomics from CORE Econ, which is free once you register as a learner. A supplementary principles text is available through the library for alternative explanations and extra practice, and the unit maps its chapters against the weekly topics. What you are examined on, however, is the CORE text together with the pre-workshop videos and the workshops.
What is the difference between absolute and comparative advantage?
Absolute advantage compares how much each producer can make from the same resources. Comparative advantage compares what each producer gives up to make one unit, and it is the one that decides who specialises. A producer can hold both absolute advantages and still have the comparative advantage in only one good, because in a two-good setting the two opportunity costs are reciprocals of each other.
How do you find the optimal consumption bundle?
List the bundles that spend the whole income, total the utility of each, and take the highest. The faster route divides the marginal utility of each good by its price: if a dollar buys more satisfaction in one good than the other, shifting spending toward that good raises the total, so the best bundle is the one where the two ratios have met.
With whole units the two ratios rarely land exactly equal, and the test becomes whether any single swap still improves the total.
What separates a substitution effect from an income effect?
A price change turns the budget line and shrinks what the income commands, and the two consequences are separated in a fixed order. The substitution effect is the move along the original indifference curve to the new relative price, and after a price rise it always moves consumption away from the dearer good.
The income effect is the move to the final bundle at the new slope, and its direction depends on whether the good is normal or inferior.
How do you find a Nash equilibrium in a simultaneous game?
Scan the payoff grid twice. Hold each of the column player's actions fixed and mark the row player's better payoff, then hold each of the row player's actions fixed and mark the column player's better payoff. Any cell carrying both marks is a Nash equilibrium, and it is written with the row action first. A game can have one such cell, several, or none in the pure actions shown.
Is there a hurdle requirement?
The unit's own pages do not state one. They list a hurdle requirement heading and route the reader to the Monash Handbook rather than publishing a threshold, so the honest answer is that this has to be confirmed in the Handbook entry for the current offering. Do not read the absence of a stated threshold on the unit site as a statement that no requirement exists.
How to study for the exam
Work the unit in the order it is delivered rather than by topic. Complete the pre-workshop preparation before the workshop, because the workshop exercise is group work done in the room and cannot be caught up afterwards. Redraw every diagram from its assumptions rather than from memory: the frontier, the budget line, the indifference map and the two-by-two payoff grid each take under a minute and each carries its own verdict.
Build the single A4 sheet, written on both sides, that the in-class tests allow, and build it early and revise onto it, keeping the two exchange rates, the equal marginal utility per dollar condition and the definitions of dominance and Pareto efficiency on it. Confirm weights, dates and any hurdle requirement on the unit's Moodle site and in the Monash Handbook rather than relying on any summary, including this one.
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