Download AP Economics-Course Syllabus

ADVANCED PLACEMENT MICROECONOMICS & MACROECONOMICS
COURSE SYLLABUS
2014 - 2015
Mr. Tom Warnke
Overall Course Objectives:
Students will be able to:
 Demonstrate economic questioning and analysis skills
 Interpret and use a variety of graphical and mathematical models
 Gain a working knowledge of the development of modern economic
theory, including Keynesian and Monetarist theory
 Use and interpret the language of business and basic measurements of
economic performance
Content Summary - Microeconomics:
1. Basic economic concepts: scarcity, choice, opportunity cost,
production possibilities curve, marginal analysis, circular flow
model, absolute and comparative advantage
2. Nature and function of product markets: supply & demand,
elasticity, consumer choice, firm production costs and revenues,
pricing, perfect competition, imperfect competition
3. factor markets: derived demand, factor pricing
4. Role of government: government regulation, public goods,
externalities, distribution of wealth
Content Summary – Macroeconomics:
1. Review: basic economic concepts
2. Measuring Economic Performance: GDP and national income
concepts, unemployment and the business cycle, inflation
3. Macroeconomic Theory and Practice: Classical vs. Keynesian
theories, the Keynesian Model in action, aggregate demand and
aggregate supply, national income and price determination,
fiscal policy, money, banking, financial sector, and monetary
policy, the Phillips Curve
4. Economic Growth and Productivity: raising productivity
5. The International Economy: comparative vs. absolute
advantage, international trade and finance, comparative
economic systems
MICROECONOMICS
Unit 1: Basic Concepts (The Economic Way of Thinking)
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Key Topics: Scarcity, choice, opportunity cost, PPC, marginal analysis,
comparative vs. absolute advantage
Readings: Baumol & Blinder, Chapters 1 & 2
Assignments: as assigned by instructor
Unit 2: Supply & Demand
 Key Topics: demand, law of diminishing marginal benefits, supply, consumer
and producer surplus, consumer choice/optimal purchase rule, allocative
efficiency, deadweight loss, elasticity, total revenue test, price discrimination,
price floors and ceilings, efficiency vs. equity
 Readings: Baumol & Blinder, Chapters 3, 4, 5
 Assignments: as assigned by instructor
Unit 3: Costs & Revenues
(emphasis on graphs and graphing)
 Key Topics: law of diminishing marginal returns, economies of scale, costs
(fixed, variable, marginal, sunk), cost curves and the relationship between
curves, total and marginal revenues, profit and loss (MR/MC & TR/TC), breakeven, shut down, economic vs. accounting profits
 Reading: Baumol & Blinder, Chapters 6 & 7
 Assignments: as assigned by instructor
Unit 4: Perfect Competition
 Key Topics: assumptions, relationship between single firm and industry,
profit maximization, long- and short-run equilibrium, adjustment mechanism,
allocative efficiency
 Readings: Baumol & Blinder, Chapters 8 & 9
 Assignments: as assigned by instructor
Unit 5: Imperfect Competition
 Key Topics: relationship between price and MR, barriers to entry, profit
maximization, monopoly, regulation, natural monopoly, oligopoly, duopoly
game theory (dominant strategy, Nash Equilibrium, collusion, prisoner’s
dilemma game, interdependence), collusive oligopoly, monopolistic
competition (long and short run) (Note: in each imperfectly competitive
market structure, examine its effect on allocative efficiency and producer and
consumer surplus, and compare to perfect competition)
 Readings: Baumol & Blinder, Chapters 10 & 11
 Assignments: as assigned by instructor
Unit 6: Factor Markets
 Key Topics: factors of production, circular flow model, derived demand,
marginal revenue product analysis, optimal purchase rule, perfectly
competitive factor markets, profit maximization/cost minimization rule,
monopsony, economic rent, distribution of income among factors, unions
 Readings: Baumol & Blinder, Chapters 16 & 16
 Assignments: as assigned by instructor
Unit 7: The Role of Government
 Key Topics: role of government, public vs. private goods, marginal social
benefit/marginal social cost analysis, market failures, positive and negative
externalities, taxes, free riders, “tragedy of the commons”
 Readings: Baumol and Blinder, Chapters 12 and 20
 Assignments: as assigned by instructor
Examination: one short answer (15 pts.), one long answer (25 pts.), and 60 multiple
choice questions (60 pts.)
MACROECONOMICS
Unit One: Measurement of Economic Performance
Key Topics: circular flow model. Defining & measuring GDP (expenditure and
income approaches), other national accounts (NNP, NI, PI, DI), unemployment
(definition & types) and business cycles, defining & measuring inflation
 Readings: Baumol & Blinder, Chapters 21, 22, & 23
 Assignments: as assigned by instructor
Unit Two: Aggregate Supply & Demand
 Key Topics: consumption, investment, and saving; MPC & MPS, the spending
multipliers, recessionary and inflationary gaps, aggregate demand curve,
determinants of AD, aggregate supply curve, determinants of AS,
macroeconomic equilibrium
 Readings: Baumol & Blinder, Chapters 24, 25, 26
 Assignments: as assigned by instructor
Unit Three: Fiscal Policy
 Key Topics: discretionary fiscal policy, balanced budget multiplier, types of
federal taxation, deficit spending, national debt
 Readings: Baumol & Blinder, Chapter 27
 Assignments: as assigned by instructor
Unit Four: The Financial System and Monetary Policy
 Key Topics: money and the money supply, Federal Reserve System (FED),
managing the money supply, instruments of monetary policy, money
multiplier, determinants of real and nominal interest rates
 Readings: Baumol & Blinder, Chapters 28 & 29
 Assignments: as assigned by instructor
Unit Five: Fiscal & Monetary Policy in the Real World
 Key Topics: velocity theory of money (MV=PQ), monetarist theory,
stabilization lags, balanced budgets, short and long term deficits, selfcorrecting mechanism, inflation, unemployment, and the Phillips Curve,
rational expectations theory
 Readings: Baumol & Blinder, Chapters 30, 31, 32
 Assignments: as assigned by instructor
Unit Six: International Trade and Monetary Exchange
Key Topics: absolute and comparative advantage, arguments for free trade, balance of
trade, balance of payments, interest rates, exchange rates, currency appreciation and
depreciation
 Readings: Baumol & Blinder, Chapters 33, 34, 35
 Assignments: as assigned by instructor
Examination: one long answer (25 pts.), one short answer (15 pts.), & 60
multiple choice questions (60 pts.)