ECON 103:

Economic Principles and Problems

Geoff Schneider

Assistant Professor of Economics

Bucknell University, Fall 2002

Prof. Schneider’s Office Hours: M W F 11-12, T 2-3 and by appointment.

Office: 171 Coleman Hall. Office Phone: 577-3446.

Email address: . Web page: http://www.facstaff.bucknell.edu/gschnedr/

Teaching Assistants: Lindsey Goldstein and Adam Hoffman. Teaching assistant office hours will be announced the second week of class.

Class Meetings

Classes meet on Monday, Wednesday and Friday. Films and Exams are scheduled for Wednesdays 7:00-8:30 PM in Vaughan Lit. Auditorium. There will also be an additional showing of films at 4:00 PM on Wednesdays. For those people with Wednesday evening conflicts, exams will be rescheduled by prior arrangement with Prof. Schneider.

Course Description

This course will provide an introduction to modern microeconomics, macroeconomics, international economics and political economy. It will acquaint you with the prevailing economic theories used by today’s policy makers. You will learn to use and apply those theories, as well as to understand their limitations and shortcomings. We will discuss a number of alternative economic theories and perspectives, with the ultimate goal being to increase your awareness and understanding of economic issues, to improve your ability to evaluate various policy options, and to help you decipher political-economic rhetoric. The overall purpose of this course is to acquaint you with basic principles of economic analysis and to engage in a substantive critique of our current global economic system. Since much of economics is concerned with solving the economic problems that exist in society, a significant portion of our time will be devoted to studying what various economists think are the major problems confronting the US economy, and what solutions to these problems economists have to offer.

A General Note About This Class

Economics is a subject which comes easily to some students but is difficult for others. Economic logic and analysis is often hard to grasp, and can only be mastered through perseverance and practice. To facilitate the learning of economics, it is necessary to keep up with readings, work on problem sets, participate actively in discussions, and write thoughtfully about films and current events. The combination of these approaches to learning economics (reading, analyzing problems, interacting as a class, and writing) should help improve your understanding of the field as well as your performance on exams. Since each new section in this course builds on previous sections, it is extremely important that you do not fall behind. This course involves a significant amount of work, but in my experience the workload is both manageable and necessary for you to get a firm grasp of the material.

Texts

1.  Riddell, Shackelford, Stamos and Schneider (RSSS). Economics: A Tool For Critically Understanding Society, Sixth Edition. New York, N.Y.: Addison Wesley, 2002.

2.  Sackrey, Schneider and Knoedler (SSK). Introduction to Political Economy, Second Edition. Somerville, Mass.: Dollars and Sense, 2002.

3.  Zinn, Howard. A People's History of the United States, Abridged Edition. New York: HarperCollins, 1997.

4.  Electronic Reserve Readings: there will be regular readings on electronic reserve at the library home page. Electronic Reserves are available via the internet from any campus computer. The e-reserve password for this course is: adamsmith (one word, no caps).

5.  Email Readings: as important economic events occur, I will frequently email topical articles to you. You will need to check your email daily and read the articles I send to you.

6.  The New York Times, Internet Edition. We will be discussing current economic events throughout the semester. You will need to keep up with the news on a regular basis, because you will be asked to apply the theories we discuss in class to the contemporary economic world around us. As soon as possible, visit the New York Times web site at http://www.nytimes.com/. Sign up for an online subscription, which is free. Check the newspaper daily for current economic events.

There are three main texts for the course, 1) Riddell, Shackelford, Stamos and Schneider (RSSS), 2) Sackrey, Schneider and Knoedler (SSK), and 3) Zinn. There are also a number of readings on electronic reserve at the library. The electronic reserves, Zinn and the SSK book explore economic issues and debates, while the RSSS book covers the basic parameters of the debates as well as the graphs and technical topics we will be studying. You should read the relevant passages in your texts before we go over the material in class. This will help you immensely in understanding the topics being covered and it will also help to identify the areas you find confusing so that we can spend more time on them in class. Assigned articles and chapters will be used as a basis for discussion in class on the day they are listed.

You can find electronic reserve documents through the Bucknell library home page. Most of the readings will be in the folder Shared Readings for Econ103, although some will be in the folder under my name. Old exams are also available on electronic reserve. There is a password for e-reserve documents. As noted above, the password is “adamsmith” (all one word, no caps).

Analytical Paper / 15%
Exam 1 / 12%
Exam 2 / 24%
Exam 3 / 24%
Homework Assignments / 25%

Grading

Analytical Paper (15%): You will write one paper during the first part of the semester. In the paper you will be asked to analyze the economic issues discussed in the readings and films. Your paper should be clearly written and the analysis must be original, carefully thought out, and effectively supported with examples. Whatever you choose to write about, do NOT simply summarize the films and readings. The purpose of this paper is for you to demonstrate the ability to critically evaluate the content of the readings and films, and to make connections between these materials and the ideas we discuss in class. Your paper should be 4-5 pages in length (typed, double-spaced, 1 inch margins, 12 point Times New Roman font). Your paper may not exceed 5 pages in length, so be concise.

Exams (60%): There will be three examinations over the course of the semester. Exam 1 is a short test on the productions possibilities and supply and demand models that is worth 12% of your grade. There will be no essay question on exam 1. Exams 2 and 3 are each worth 24% of your grade. As with exam 1, there will be questions involving graphical analysis along with short answer questions requiring some explanation. Exams 2 and 3 will also feature a long essay question on films and readings. On the essay questions, I will be looking for the same kind of critical analysis that you are to include in your paper. The best way to prepare for exams is to go over the homework assignments. The homework assignments are designed to prepare you for the tests. In fact, many of the problems on homework assignments are taken from past exams. The answers to most homework assignments will be placed on electronic reserve so you can study them.

Homework Problems (25%): There will be thirty three (33) daily homework assignments distributed during the course of the semester. Most days that you have class you will have a short assignment that is due at the beginning of class. You must turn in at least 25 of these 33 assignments. You may work together on parts of these assignments (the technical problems, such as the graphs and tables), but you may not copy each other verbatim (i.e., you may work together on an approach to a problem but you may not write up your final answers together). Also, you may not work together on the problems that require you to comment on the readings. Because you are allowed to miss up to 8 assignments, late assignments will NOT be accepted. You may turn in more than 25 of the assignments for extra credit.

Extra credit policy: Each homework assignment you turn in after #25 will earn you up to 20 bonus points to be applied towards your homework score. I will take your score on each extra homework assignment, divide it by 5, and then add that number of points to your homework score. I have found that this method has a greater positive impact on your overall grade than just replacing a lower homework grade with a higher homework grade. This means that you can easily bring up your homework average by turning in a few extra assignments, and that you can earn greater than a perfect score on your homework grade if you are particularly diligent.

Keep an extra copy of each of your homework assignments to study from. Because of the volume of assignments, it will usually take us a couple of weeks to return materials to you. Make sure that you have an extra copy of each homework assignment that you turn in to study from.

Class Participation and Attendance will be used to determine if students on the borderline between two grades receive the higher or lower grade. Attendance is required. More than one unexcused absence will result in a lower grade in the class.

¨  All items will be graded on the following scale: A: 92-100, A-: 90-91, B+: 88-89, B: 82-87, B-: 80-81, C+: 78-79, C: 72-77, C-: 70-71, D: 60-69, F: 0-59.

Course Calendar

Date / Topic
1. W Aug. 28 / Introduction
Readings: 1) Syllabus.
W Aug. 28, 4PM, 7PM / No film
Section I: Economic Approaches, Philosophies and Systems
The first section of the course addresses the following questions: (1) What is the proper method for studying the economy? (2) What have four of the greatest economic philosophers, Smith, Marx, Veblen and Keynes, said about economics? and (3) What types of economic systems are there in the world today, and how do they differ from each other? In this part of the course it is very important to keep an open mind. All of the perspectives we study have their merits, and you need to appreciate and understand the strengths and weaknesses of each of them. It is also important during this first part of the course to develop your critical analysis. Work on evaluating everything you read, develop your own ideas on each subject, and then be able to support your ideas and opinions with examples, data, and logical analysis. The analytical paper, due Monday, September 23rd, will test your ability to assimilate, apply and analyze the key ideas from the first section of the course. The homework assignments during this part of the course will help to prepare you for the paper by stimulating your critical thinking and prompting you to react to various materials. You should be able to use sections of your answers to homework questions in your paper.
2. F Aug. 30 / What is economics? H1
Readings: 1) RSSS Ch. 1. 2) SSK, “Political Economy Critique of Mainstream Economics.” 3) RSSS Ch. 7.
3. M Sept. 2 / Feudalism, Mercantilism and Early Capitalism H2
Readings: 1) RSSS Ch. 3. 2) Zinn Ch. 1.
4. W Sept. 4 / Adam Smith and Laissez-Faire H3
Readings: 1) Jensen, “Adam Smith” (e-reserve). 2) RSSS Ch. 4 and pp. 82-90.
W Sept. 4, 4PM, 7PM / Film: Greed with John Stossel
Readings: “A Note on the Film Series” (syllabus).
5. F Sept. 6 / Capitalism, Socialism and Karl Marx H4
Readings: 1) SSK, “The Marxist System.” 2) RSSS pp. 90-96.
6. M Sept. 9 / Social Class H5
Readings: 1) SSK, “Social Class.” 2) Frank, “The Victimless Income Gap?” (e-reserve). 3) Zinn Ch. 2.
7. W Sept. 11 / Thorstein Veblen on Predatory Behavior and Conspicuous Consumption H6
Readings: 1) SSK, “Veblen on the Predatory Nature of Capitalism.” 2) Cassidy, “No Satisfaction” (e-reserve).
W Sept. 11, 4PM, 7PM / Film: Free Trade Slaves
Readings: 1) RSSS pp. 41-44. 2) Goldberg, “Sweatshop Chic” (e-reserve).
8. F Sept. 13 / John Maynard Keynes and Macroeconomics H7
Readings: 1) SSK, “John Maynard Keynes.” 2) Zinn Ch. 3 and pp. 237-239, 250.
9. M Sept. 16 / Economic Systems H8
Readings: 1) SSK, “The Middle Way.” 2) Rohlf, “Mixed Economies” (e-reserve).
10. W Sept. 18 /
The US Economic System According to Howard Zinn H9
Readings: 1) Zinn Ch. 4-7.
W Sept. 18, 4 PM,7PM / Film: Affluenza
Section II: Supply and Demand
The second section of the course develops the supply and demand model that is the cornerstone of modern neoclassical economics. This section is very graph-intensive, and those of you who have difficulty with quantitative analysis and/or working with graphs will need to spend extra time on this material. The key to understanding the supply and demand model is practicing its use. In addition to working through the homework assignments, you should practice on your own or with your fellow students. Just because it makes sense in class does not mean that you do not need to practice solving problems on your own. If you are able to do the homework assignments without your notes or to design and solve your own supply and demand problems, then you probably have a good understanding of the material. Exam #1 will test your understanding of the supply and demand model as well as the production possibilities model covered earlier in the semester. Old exams are available on electronic reserve to help you prepare for this test.
11. F Sept. 20 / Supply (S) and Demand (D) H10
Readings: 1) RSSS Ch. 8.
12. M Sept. 23 / Supply (S) and Demand (D), Continued
Readings: 1) RSSS Ch. 8.
Paper is due in class.
13. W Sept. 25 / S & D, Price Supports and Price Ceilings H11
Readings: 1) Wartzman, “Falling Behind” (e-reserve). 2) RSSS, “Economics of the minimum wage” (pp. 223-6).
W Sept. 25, 4 PM,7PM / Film: Rollover: The Hidden History of the SUV
14. F Sept. 27 / Elasticity of Demand and Advertising H12
Readings: 1) Leonhardt, “Hey Kid, Buy This!” (e-reserve). 2)Will, “Schools Should Be Commerce-Free Zones” (e-reserve). 3) RSSS Ch. 8 pp. 152-157.
15. M Sept. 30 / Applications of Supply, Demand: Exchange Rates H13
Readings: 1) RSSS Ch. 8, “Supply, Demand and the Value of the Dollar” (pp. 150-151).