Perfect competition: Perfect competition happens when numerous small firms compete against each other. Firms in a competitive industry produce the socially optimal output level at the minimum possible cost per unit. Macroeconomics studies national economies, concentrating on economic growth and how to prevent and ameliorate recessions. Governments fight recessions and encourage growth using monetary policy and fiscal policy. Monopoly: A monopoly is a firm that has no competitors in its industry. It reduces output to drive up prices and increase profits. By doing so, it produces less than the socially optimal output level and produces at higher costs than competitive firms. The unemployment rate measures what fraction of the labour force cannot find jobs. The unemployment rate rises during recessions and falls during expansions.

An industry consists of all firms making similar or identical products. An industry’s market structure depends on the number of firms in the industry and how they compete. Here are the four basic market structures: Public goods: Private firms can’t make money producing certain goods or services because there’s no way to exclude nonpayers from receiving them. The government or philanthropists usually have to provide such goods or services.Externalities caused by incomplete or nonexistent property rights: Without full and complete property rights, markets are unable to take all the costs of production into account. Oligopoly: An oligopoly is an industry with only a few firms. If they collude, they reduce output and drive up profits the way a monopoly does. However, because of strong incentives to cheat on collusive agreements, oligopoly firms often end up competing against each other.

The unemployment rate, which measures what fraction of the labor force consists of those without jobs who are actively seeking jobs, normally rises during recessions and falls during expansions. Snagging a job as an economist is fiercely competitive—and highly lucrative. Having microeconomics under your belt as you work toward completing your degree will put you head and shoulders above the competition and set you on the course for career advancement once you land a job. So what are you waiting for?

A recession occurs when the overall level of economic activity in an economy is decreasing, and an expansion occurs when the overall level is increasing.