Download UNIT 1: Basic Economic Concepts (Two Weeks)

AP Microeconomics
Course Syllabus
Mr. Gill
Fall 2012
Advanced Placement Microeconomics
Hello Parents,
Welcome to Advanced Placement Microeconomics! This semester long course is
designed to help you develop critical thinking skills necessary to compete in the 21st
century through the understanding, application, and analysis of fundamental
microeconomic concepts. Concepts such as scarcity, cost-benefit analysis, factor
markets, and market failures will be examined. Students will be expected to apply
quantitative and mathematical skills to economics, as well as apply economic logic to a
wide variety of real world and hypothetical situations. To help master the material we
will discuss current issues as they apply to the concepts we are discussing in class,
interpret graphs, work through free response questions from earlier exams and have a
variety of assessments designed to challenge your child and encourage taking academic
risks.
The course is very similar to microeconomics courses offered at the college level.
This course prepares students for the AP Microeconomics Examination in May. The
exam costs $89 and could help you earn 3 college credits! (Financial aid is available.
Please see Mr. DiBari.) There will be after school review sessions during the spring
semester to help you prepare for the exam. The exam consists of 60 multiple choice
questions and 3 free response questions. The outline of the course content can be found
on the back side of this paper. Be proud of your child’s decision to challenge themself
academically and once again welcome to AP Microeconomics!
Student Expectations
1. You are here to learn. Appropriate behavior is required. (Read the Text Book)
2. You must be punctual. (Read the Text Book)
3. You should participate in class discussions and contribute to the class goal of learning
economics. You should be willing to spent the extra time to meet AP course
expectations. (Read the Text Book)
4. You will respect the educational opportunity afforded to yourself and your
classmates. (Read the Text Book)
5. Keep up to date on current microeconomic activities. (Read the Text Book)
6. If you miss more than 5 classes and you do not make up the time and work you may
not get course credit. (Read the Text Book)
Grading
Tests/Papers/Projects: 50%
Quizzes: 30%
Homework/Classwork: 20%
Contacting Me
Prep Times: 1A, 4A, 3B
Phone: 256-4175 ext 69522
Email: [email protected]
Textbook
Ray, Margaret and Anderson, David.. Krugman’s Economics for AP*, Worth
Publishing, 2011
Some Additional Resources
Levitt, Steven. Freakonomics
The Economist
Wall Street Journal
The New York Times: Business Day Section
Economics in Action CD-Rom
http://economicschallenge.ncee.net –National Council on Economics Education
www.econtoday.com
http://www.myeconlab.com
www.econweb.com
www.rfe.org
UNIT 1: Basic Economic Concepts (2 Weeks)
CONTENT/ESSENTIAL QUESTIONS
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How does scarcity affect decision making? (2)
How does comparative advantage illustrate opportunity costs? (2)
What is the difference between change in supply/demand and change in quantities
supplied/demanded? (3)
How do determinants of supply and demand impact price and quantity? (3)
What relationship does the circular flow of money model illustrate?
KEY TERMS
 absolute advantage
 black market
 ceteris paribus
 circular flow of money model
 command economy
 comparative advantage
 economics
 equilibrium point
 factors of production
 free market economy
 inferior goods
 Law of Increasing Costs
 limited market economy
 macroeconomics
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microeconomics models
mixed market
normal goods
normative economics
opportunity cost
positive economics
production possibility curve
resources
scarcity
shortage/surplus
specialization
supply/demand
terms of exchange
transaction costs
Traditional market economy
voluntary exchange
wants/needs
SKILLS/GRAPHS/CHARTS (to create and interpret)
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Production Possibility Curve
Evaluate the economic merits of Smith, Malthus, Ricardo, Marx, Keyenes, Spencer
Supply and Demand Graphs- Labeling Activity
Change in demand/supply v change in quantity demanded/supplied
Comparative Advantage Charts
Analyze the Circular Flow of Money Model
Distinguish between positive and normative economics
ADDITIONAL RESOURCES
 Video ABC News “Greed” by John Stoessel
 Wealth of Nations by Adam Smith
 Communist Manifesto by Karl Marx
 Stages of Growth: A Non- Communist Manifesto by Walt Rostow
UNIT 2: Nature and Function of Product Markets (12 Weeks)
ESSENTIAL QUESTIONS
 What are the determinants (non-price) of supply and demand? (3)
 What factors affect elasticity of demand? (20)
 How do households decide how much of a product to demand, labor to supply, how
much to spend and how much to save? (19)
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How do consumers use marginal analysis during the decision making process?(19)
What is the difference between marginal and total utility? (19)
Why do diamonds cost more than water even though one cannot live without
water?(19)
How may government policies impact price and output? (4)
How does the payoff matrix illustrate the game theory? (25)
How does the prisoner’s dilemma illustrate game theory?(25)
What is the difference between the short and long runs? (22)
What is the difference between accounting and economic profits? (22)
What are the characteristics of perfect competition, oligopolies, monopolies and
monopolistic competition? (23,24,25)
KEY TERMS
 adjustment mechanisms
 allocative efficiency
 artificial shortage (4)
 artificial surplus(4)
 break even point
 calculating price
 cartels (24)
 collusion (25)
 consumer choice (19)
 consumer surplus
 cost minimization
 costs (total, marginal, fixed, variable)
 cross price
 dead weight loss
 determinants of demand
 determinants of supply
 diamond-water paradox
 diminishing returns
 diseconomies of scale
 economies of scale
 efficiency
 elasticity
 excess capacity
 excise taxes
 explicit and implicit costs
 free market price
 game theory
 income elasticities of demand
 inefficiency
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interdependence
law of diminishing marginal utility
long-run
marginal productivity
marginal utility
market structure
monopolistic competition
monopoly
oligopoly
perfect competition
price ceilings
price discrimination
price elasticity of supply
price floors
price wars
producer surplus
product differentiation
profit (economic v normal)
profit maximization
revenue (total and marginal)
quotas
Short –run profits and losses
Shut Down
tariffs
util
utility
SKILLS/GRAPHS/CHARTS (to create and interpret)
 Shifts in supply and demand
 Production (Total and Marginal) cost curves
 Create and interpret cost and revenue charts
 Competetive Firms and Competetive Industry
 Consumer and Producer Surplus
 Economies (and diseconomies) of Scale Diminishing Marginal Utility
 Long Run Average Cost Curves
 Marginal Cost Curves
 Elasticity Curves (Perfectly elastic and perfectly ineleastic)
 Monopoly Firms with excess profits and minimizations of losses
 Monopoly Inefficiency (allocative and technical)
 Price floor and Price ceiling graphs
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Marginal and Total Utility Chart
Monopsony Model
Kinked Demand Curve
Perfect and Imperfect Competion
Monopolistic Competition (Long-Run Equilibrium)
ADDITIONAL RESOURCES
The Popcorn Stand Story- A story of economies of scale
Atlas Shrugged by Ayn Rand
UNIT 3: Factor Markets (3 Weeks)
ESSENTIAL QUESTIONS
 In what sense is demand for labor “derived” demand? (27)
 What is the relationship between a firm’s marginal revenue product curve and it’s
demand for labor? (27)
 What are the key factors that influence elasticity of demand for inputs? (27)
 How are equilibrium wage rates determined? What impact do labor unions have on
wages and productivity? (28)
 What impact do monopsonists have on wages? (28)
 What role does economic rent play in the decision making process? (29)
KEY TERMS
 Derived Factor Demand
 Economic Rent
 Income inequality
 Labor Market
 Labor Supply and Wages
 Marginal Revenue Market
 Market Distirbution of Income
 Minimum Wage
 Monopsony
 Price of Capital (Physical and human)
 Product Market Monopolies
 Unions
 Wages
SKILLS/GRAPHS/ CHARTS (to create and interpret)
 Credit Market
 Derived Demand
 Economic Rent
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Labor Market
Marginal Factor Cost Curve (monopsonists)
Margnal Physical Product
Wage Rates
ADDITIONAL RESOURCES
Is Wal-Mart Good for America?-PBS Frontline Series
UNIT 4: Market Failure and the Role of Government (3 Weeks)
ESSENTIAL QUESTIONS
 What are market failures? (5)
 What powers does government have to correct market failures? (5, 31)
 Distinguish between public and private goods. (5)
 How does the Lorenz curve represent a nation’s economic distribution? (30)
 How should a nation address poverty, health- care, education? (30)
 How should the government monitor social costs and social benefits?
 At what point should the government attempt to correct a market failure?
 Distinguish between social and private costs.
 How can the market, as well as government, correct positive and negative
externalities?
 Can there be environmentally friendly economic growth?
 What are the costs of recycling scarce resources?
KEY TERMS
 Anti- Trust Policies
 Externalities (Positive and Negative)
 Free Riders
 Gini Coefficient
 Human Capital
 Income Distribution
 Income Redistribution
 Lorenz Curve
 Marginal Social Benefits
 Marginal Social Costs
 Poverty (absolute and relative)
 Public v Private Goods
 Tax policies
 Transfer Payments
 Transfers in Kind
SKILLS/GRAPHS/ CHARTS (to create and interpret)
Lorenz Curve
Marginal Social Costs (Negative Externalities)
Marginal Social Benefits (Positive Externalities)
ADDITIONAL RESOURCES
An Inconvenient Truth by Al Gore