Introduction to MicroeconomicsEC1001 (ITE)
2006-2007Course outline: microeconomics
Weeks / Content / Lecturer / Contact detailsPeriod 1 / Microeconomics / Professor JohnCubbin / Room: D310
Phone: 020 7040 8533
E-mail: via WebCT
Web:
Office hour; Fri 10.30-12.00
Lectures
Two a week, starting Monday September 26th. All lectures will be in the Oliver Thompson Lecture Theatre, TaitBuilding.
Monday 1.00pm – 1.50pm,Friday 1.00pm – 1.50pm.
Lecture slides, handouts and any other course materials for weeks 1-10 will be available on WebCT in CitySpacevia WebCT at You will need to log in regularly to access course notes, and self-test modules, (also if you want to email me about the module.) (See below – accessing course materials.)
Workshops
Workshops begin in Week 2 and are held in the Great Hall. You will be seated so that there is room for Workshop Assistants to walk amongst you. (Two rows occupied, one blank.)
Each student will be assigned to one of twoworkshops on Mondays 2-3 or 3-4 starting in week 2 (2 October). A typed worksheet will be handed out as you enter the room containing a number of questions.
Students then work through one or two questions, discussing them with their neighbours as they do them, perhaps asking for clarification form any workshop assistants that may be present on that day. The lecturer then goes through the answers from the front. Then the students do another one or two questions, and so on.
Obviously to get the most out of the workshops you will need to have attended the lectures and read the relevant part of the text during the previous week.
The workshops are the best preparation for the coursework assessment in week 6 (see below.)
Clinics
Some bits of economics can be hard to grasp at first, and you might need someone to clarify matters for you.
There will be a weekly clinic hosted by an experienced and sympathetic teacher in room D318 of the Social Science building. Time to be announced.
MyEconLab (MEL)
When you buy the text book you also get an access code allowing you access to a wide range of on-line teaching materials including the Sloman study guide and MyEconLab. In the first lecture there will be a 10 minute slot to show you how to use this facility. The section of Prentice-Hall which manages this resource is called CourseCompassTM.
You will need to register online using the access code provided to you on the student access card when you buy the text book. You will also need the course ID which is
cubbin74424
ITE Educational aims & objectives:
This course aims to introduce the concepts of economic analysis and to develop an understanding of the principles, theories and analytical tools that characterise economics as a social science. The objectives of this course are to:
- Enable you to understand the behaviour of consumers, firms, markets and the economy
- Apply the economic principles and theories to which you have been introduced to the understanding and explanation of common economic phenomena
- Provide the foundations for students progressing to intermediate level economic theory and applied courses.
Learning outcomes:
On successfully completing this part of the course, you will be able to demonstrate a knowledge and understanding of:
- key aspects of the behaviour of consumers, firms and markets;
- the implications of changes in relevant variables on the equilibrium of markets;
- the determinants of market structure and its effect on a firm’s supply and pricing decisions;
- the principal rationale for Government intervention in markets, and the basis upon which conclusions might be reached about the desirability of market outcomes on the grounds of economic efficiency.
The principal textbook for this course is: Sloman, J. (2006) Economics. 6th edition. Prentice Hall (copies can be obtained on 7-day or short term loan from the main library, shelf-mark number: 330SLO). When you purchase this you get access to a range of electronic study aid materials called MyEconLab.
INTRODUCTION TO MICROECONOMICS: TOPIC STUDY GUIDE
The required readings listed below provide a starting point for your personal study and should be read before the corresponding lecture. Additional reading material will be suggested in lectures for some topics.
Topic / Objective / Required reading1. economics as a social science discipine: theory, methods & applications. / To understand the sorts of questions economists study, and the distinctive theoretical and empirical ‘toolkit’ economists use to analyse them. / Sloman Ch.1: Introducing economics.
2. analysing markets: supply & Demand / To introduce you to the analysis of demand, supply and the price mechanism. / Sloman Chapter 2: Supply and demand Sections 2.1 – 2.3
3. elasticity / To extend your understanding of demand and supply theory, including:
- elasticity of demand and supply
- applications
- the effects of government policy e.g., price ceilings, taxation.
4. Utility and the model of rational consumer choice / To deepen your understanding of consumers’ choices.
- The meaning and measurement of utility
- Indifference curves
- Budget constraints
- Equilibrium of the consumer
- Income and substitution effects
- Derivation of the demand curve
- Consumer’s surplus
5. Production and cost / To understand in more detail the determinants of supply, including:
- The production function
- Diminishing returns
- Returns to scale
- Isoquants and isocosts
- Short- and long-run cost curves
INTRODUCTION TO MICROECONOMICS: TOPIC AND STUDY GUIDE
Topic / Objective / Required reading6. Market structure: Perfect Competition / To develop an understanding of the model of perfect competition (and the purpose of this model) including
- Short- and long-run equilibrium of the firm and industry
- Derivation of the supply curve of the firm and industry in the short- and long-run
5. Market structure: Pure Monopoly; perfect contestability / To understand the relationship between the structure of an industry and firms’ behaviour, including
- Pure monopoly
- Discriminating monopoly
- Contrasts with perfect competition
- The theory of perfect contestability
6. imperfect competition: monopolistic competition / To understand profit maximising choices made by firms that are monopolistically competitive.
- Monopolistic competition
7. imperfect competition: Oligopoly / To understand the relationship between the structure of an industry and firms’ behaviour, including
- Duopoly and oligopoly
- Kinked demand curves
- Game theory
8. The economics of labour markets / To understand the economics of labour markets, including
- Demand and supply of factors of production
- Marginal productivity theory
- The individual’s supply of labour
9. Welfare economics / To introduce the use of normative (welfare) economics to guide economic policy, including
- Pareto optimality
- Allocation and distribution
- Market failure & role of government.
Microeconomics: Further reading and study guide
For each topic, your study of economics begins by reading the chapters in Sloman (2006) detailed above, attending lectures and participating in workshops.Your personal study should build on this by reinforcing, testing and extending your understanding of the concepts and principles learned.
1. Reinforce your understanding.
There is a wide range of excellent introductory economic theory textbooks available. If you still find a particular concept difficult to understand, try consulting an alternative textbook (the chapters relevant to each topic are usually easy to identify). Sometimes a slightly different explanation helps. The following are recommended and are available in our library:
- Parkin, M., Powell, M., Mathews, K. (2003) Economics 5th edition. Addison Wesley [library: MAIN 330 PAR]
- Samuelson, P.A., Nordhaus, W.D. (1995) Microeconomics, 15th edition, McGraw Hill.
- Begg, D., Fischer, S., Dornbusch, R. (2003) Economics, 7th edition, McGraw Hill. [library: MAIN 330 BEG]
2. Practice and apply the concepts.
Sloman (2006) - and most of the textbooks listed above - are accompanied by workbooks or study guides. It is strongly recommended that you monitor your own progress by working through the exercises relevant to each topic.
- Sloman, J., Sutcliffe, M. (2000) Student workbook and reader, (to accompany Sloman) Prentice Hall, 4th edition. [library: MAIN 330 SLO]
- Smith, P. (2000) Workbook(to accompanyBegg, Fischer and Dornbusch ), McGraw Hill.
[library: MAIN 330 BEG]
- Atkinson, B. (2000) Study Guide. (to accompany Parkin, Powell and Matthews), Addison Wesley. [library: MAIN 330 PAR]
3. Test your understanding
Attempt the quizzes available in MyEconLab
Attempt the exercises and tests available on the websites accompanying the textbooks.
- The website for the Sloman book is:
Prentice Hall provide good support to students on this web site and a representative from the company will give a short talk at the first lecture.
- The website for Begg, Dornbusch and Fischer is:
Then click Student Centre and the Chapter you want to check and self-test.
- The website for the Parkin book is:
Attempt previous years’ exam papers for this course. Examination papers for 2000 – 2006 are available from the library’s website:
4. Extend your knowledge
An important aspect of training in economics is the development of skills in numeracy. This course uses basic mathematical concepts. Students intending to major in economics are particularly encouraged to familiarise with the expression of economic problems in mathematical form. The following are recommended, and are available in our library:
- Archibald, G.C., Lipsey, R.G. (1973) A mathematical treatment of economics, Weidenfeld and Nicholson. [library: 330.0151 ARC]
- McKenna, C.J., Rees, R. (1992) Economics: a mathematical introduction. Oxford. [library: 330.0151 MCK]
- Thomas, R. (1999) Using mathematics in economics, Longman. [library: 510.2433 THO]
5. See Economics in Context as a Social Science
The methods and concerns of economics have application beyond simply market transactions. Three recent contributions by economists to this broader sphere can be found in the following leisure time reading:
Harford, Tim (2006) The Undercover Economist. Little, Brown. (We have requested a copy of the DVD of his TV series Trust Me, I'm an Economist for purchase by the library.)
The following are also now available in paperback:
Levitt, S.D., and Dubner, S.J. (2005) Freakonomics Allen Lane.
Layard, Richard (2005) Happiness Allen Lane.
Coyle, Diane (2004) Sex, Drugs and Rock and Roll Thompson.
These are especially recommended if you are new to economics and are wondering what it is all about. (However, these books are no substitute for mastering the technical material!)
Economics links
Try accessing the following to learn more about the profession and content of economics
Accessing course materials
You will automatically be registered on the module via WebCT (also known as Cityspace). Once you have your computer sentre log-in and e-mail log on to the Web and visit (Bookmark it as a favourite in your web browser.) This will provide you with materials such as:
- Copies of each week's lecture notes in advance and animated slides afterwards
- Admin information e.g. about coursework etc.
- Links to background materials
- Other material of interest
- A specimen exam (by week 7)
You will need to consult the site regularly since materials may only be availablewithin a fixed time span – e.g. lecture notes 3 days before and two weeks after each lecture. If you access from outside the university your browser may need adjusting e.g. to allow pop-ups and Java scripts. Details will be provided when you first access Cityspace.
Assessment
Coursework and exams will be weighted 0.2 and 0.8 respectively.
Coursework
One of the purposes of coursework is to give you feedback on how well you know the material, and where your weaknesses are. This year the course work will be in the form of a multiple choice question paper in week 6 of the term ("teaching period") held during the time for the workshops. Please see the Undergraduate Handbook on rules relating to missed coursework.).
Progress to the second year is dependent on your passing the examinations in January and satisfactorily completing the coursework during the term. If you miss a coursework the next opportunity to sit it may be the following August/September re-sit period and your module mark may be capped at the pass mark. Check the details with the course handbook.
Lectures and Workshops Etiquette
The lecture will take place in the Oliver Thompson Lecture theatre, and workshops in the Great Hall. In a large group it is important that we do not waste time dealing with the odd thoughtless or uncouth individual.
In lectures you are expected to be quiet and not disturb others in the room. Listen and try to understand what is being said. Put up your hand if you think the lecturer is being really obscure and think that some clarification would e helpful.
In workshops the period is divided into working sections and answer sessions. In the working session you are encouraged to talk to your neighbour(s) to discuss the answer. Assistant(s) will (I hope) be walking round to answer queries. After a few minutes the instructor will signal that it is time to look at/discuss the answers. You should be quiet during this period.
If you wish to raise a point put up your hand. If for pressing personal reasons you need to leave the room during the lecture or workshop session please do so quietly. Turn off mobile phones before entering, and I will try to remember to do the same! Do not text or listen to ipods, MP3s etc during lectures or workshops, and neither will I.
Past examination papers can be accessed, from City machines only, on the Library’s web pages at Previous years’ papers are available in hardcopy only from the Short Loan Collection at the Northampton Square Library. Remember, when you are looking at these, that the structure of exam has varied from year to year.
(Last year the Introduction to Microeconomics and Introduction to Macroeconomics were part of the same module so there is just one exam covering the two topics.) This year there will be two separate exams, Microeconomics in January, Macroeconomics in the summer term.
John Cubbin
September 2006
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