Economics 101: Principles of Microeconomics

Economics 101: Principles of Microeconomics

ECONOMICS 101: PRINCIPLES OF MICROECONOMICS

Summer 2003

Instructor: Wenzhuo Shang

Section 2 (MTWRF 11, Agron 2050)

Fast Facts:

 Webpage:

 Instructor contact information:

E-mail:

Office: 327 Curtiss Hall, 294-4827

Hours: TR 2:00-3:00 and by appointment

 Teaching assistants

Jae Bong Chang Jyotiska Mitra

Office: B12 Curtiss, 294-8107 Office: 301 Curtiss, 294-8190

Email: Email:

Hours: not available now Hours: M 12:00-2:00

 Announcements: Check the webpage regularly for announcements – especially if you miss a lecture.

Course Overview:

Economics is the study of how society manages its scarce resources including natural resources, human labor, environmental amenities, and “capital”. In countries with “market economies”, decisions made by millions of households and firms determine how these resources are used. Individual decision makers do not act in isolation, however. Instead, their actions are coordinated by the market mechanism. This course, in particular, is an introduction to microeconomics, the study of how “agents” (individuals, households, business firms, government agencies, etc.) make resource allocation decisions and how the market works to reconcile all of these decisions.

Goals of Econ 101:

To understand how consumers decide what and how much to consume, how firms decide how many inputs to use and how much output to supply, and how these decisions are influenced by a market economy. To be comfortable conducting simple market analysis using supply and demand. To understand the circumstances under which competitive markets result in socially optimal outcomes, and to understand why unregulated markets result in inefficient outcomes in the presence of imperfect competition or externalities.

Book Purchases:

Text (required): Robert E. Hall and Marc Lieberman. Microeconomics: Principles and Application, 2nd edition updated. South-WesternCollege Publishing, 2003.

Study Guide (recommended): Geoffrey A. Jehle. Mastery Study Guide for Microeconomics: Principles and Application, 2nd edition. South-WesternCollege Publishing, 2003.

The book contains a Graphics Workshop on CD-ROM. The CD-ROM contains review material for each chapter as well as simple-to-use software that you can use to conduct graphical analysis. The book’s website is where you can also find something useful.

Grading Policy:

Quizzes 15%

Problem Sets15%

Midterm 120%

Midterm 220%

Final Exam 30%

 Quizzes: There will be a few in-class quizzes throughout the course. The time will be announced in class. All the scores will be considered in the final assessment and there will be no make-up quizzes.

 Problem Sets: There will be 3-4 problem sets during the course. Problem sets must be turned in during class on the assigned due date. Late problem sets will not be accepted unless the student has provided prior notification for a valid excuse.

 Midterm Exams: There will be two midterm exams. The time will be announced in class. Make-up exams will not be given. In the case of a medical or family emergency, where the student has an excused absence, their final grades will be determined by weighing the other factors more heavily.

 Final Exam: The final exam will be accumulative and take placethe day before the last day of class, i.e. August 8th.

Tentative Course Outline and Reading Assignments:

  1. Introduction
  1. Economics, Scarcity and Choice
  2. Micro vs. Macro
  3. Positive vs. Normative
  4. Methods of Economics
  5. Opportunity Costs and Production Possibility Frontier
  6. Specialization and Exchange

Read: Chs. 1, 2

  1. Supply and Demand
  1. Price and Consumer Demand
  2. Price and Business Output
  3. Equilibrium in the market
  4. Shifts in Demand and Supply
  5. Price Change and Demand Elasticity

Read: Chs 3, 4

  1. Demand and Consumer Choice
  1. Consumer Preference and Utility
  2. The Budget Constraint
  3. Utility Maximization with Budget Constraint: Marginal Analysis
  4. Income and Substitution Effects
  5. Individual and Market Demand Curves

Read: Chs 4

  1. Production and Costs
  1. Inputs, Outputs and the Production Function
  2. Costs
  3. Short Run vs. Long Run
  4. Profit Maximization

Read: Chs 6, 7

  1. Product Markets
  1. Perfect Competition
  2. Monopoly
  3. Monopolistic Competition and Oligopoly

Read: Chs 8, 9, 10

  1. Factor Markets

A. Labor Market

B. Capital and Financial Markets

Read: Chs 11, 13

1

Top View