ECON 101 · Year 1 · Semester 1 · 3 credits · Professional & Ethics

Principles of Microeconomics

From consumer choice to insurance demand: master the microeconomic foundations of risk, markets, and information asymmetry.

Full practice exam · 30 Q · 120 min

Season 1 · 8 episodes

The Microeconomics of Solvency: Maya Lin's Trial at Apex Mutual

When a catastrophic storm season and market disruption push regional insurer Apex Mutual to the brink of insolvency, junior actuary Maya Lin must use core microeconomic theory to redesign pricing, halt adverse selection death spirals, and defend a comprehensive restructuring plan before the state insurance commissioner.

Protagonist · Maya Lin, a brilliant first-year actuarial analyst at Apex Mutual navigating her first major rate filing and solvency review.

Setting · The actuarial floor and executive boardroom of Apex Mutual, an eighty-year-old regional mutual insurer headquartered in the hurricane-prone coastal state of Northridge.

Stakes · If Maya cannot correctly diagnose the microeconomic forces driving policyholder flight, cost escalation, and claims volatility, Apex Mutual will trigger mandatory regulatory supervision, wiping out its policyholder surplus and leaving two hundred thousand families uninsured.

Pick an episode

Episodes

Season finale: Armed with a rigorous synthesis of consumer welfare, risk-based capital requirements, and information-screening contract menus, Maya presents Apex's unified survival plan at the Department of Insurance public hearing, securing regulatory approval and stabilising the mutual's solvency.

From the lecturer: Welcome to ECON 101. Microeconomics is not an abstract prerequisite; it is the theoretical bedrock of actuarial pricing, risk transfer mechanisms, and regulatory economics. To get the most out of these lesson films, treat every episode as an interactive workshop rather than a passive viewing session. Keep an active derivation notebook beside you. Whenever a curve is plotted—whether an indifference map, a cost function, or an insurance contract frontier—pause the film and draw the axes, tangencies, and shifts on paper before watching the reveal. Divide your study notes into two columns: analytical derivations on the left and economic intuition with real-world actuarial parallels on the right. This course directly satisfies half of the SOA/CAS Validation by Educational Experience (VEE) requirement in Economics. Every concept here, from price elasticity of demand to the Rothschild-Stiglitz screening equilibrium, will reappear in your advanced ratemaking, reserving, and enterprise risk management coursework. Commit to solving all checkpoint exercises from first principles, maintain an active error log for edge cases, and let economic theory illuminate the mathematics of risk.

Cold open

At six fifteen on a Monday morning, Maya Lin arrives at Apex Mutual to find the executive floor in emergency session. Reinsurance premiums for coastal property coverage have spiked forty percent overnight following a Category Four hurricane, wiping out Apex's underwriting margin. The chief actuary turns to Maya with a stark demand: explain why premiums across the entire coastal market have surged even for inland homeowners who suffered zero storm damage, and calculate whether raising Apex's baseline rates will clear the market or trigger an immediate mass cancellation.

preparing lecture…

Transcript

Formulate linear and non-linear market demand and supply equations and define equilibrium mathematically
Distinguish rigorously between movements along curves and structural shifts driven by exogenous parameters
Derive competitive equilibrium price, quantity, consumer surplus, and producer surplus analytically
Map supply and demand mechanics to underwriting cycles and capacity constraints in actuarial practice