Download ECO 3003

COURSE SYLLABUS
ECO 3003
SPRING 2013
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Course Title: Principles of Economic Theory and Public Policy
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Course Credit Hours: 3
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Instructor Name and Contact Information:
 John Atkins,
 Marketing and Economics Department,
 [email protected],
 850-484-2122
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Prerequisites or Co-Requisites: NONE
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Course Description: This is a survey course of macroeconomic and
microeconomic principles and theory with consideration of public policy issues
that can impact the behavior of consumers and businesses. Note: This course is
designed for non-Business majors. Check with your advisor to be sure you will
get credit for this course in your major.
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Goals:
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Upon completion of the course, students will be able to understand basic
macroeconomic principles and the important roles played by consumers,
businesses and government.
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Students should better understand microeconomic principles and theory at
the completion of this course.
Economics is a social science that studies economic behavior and
generally how individuals, groups and institutions respond to economic
incentives.
Public policy can alter or impact economic behavior.
Students will be better equipped, at the completion of this course, to read
economic articles and interpret data with more insight and understanding.
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About this Course: This course is delivered completely on-line. You must have
consistent access to the Internet:
 Learning at a distance may be a very different environment for many of
you. You will generally set your own schedules, participate in class
activities at your convenience, and work at your own pace. You may
spend some additional time online during the first few weeks while you
become acclimated to the online class format. You should also be prepared
to spend approximately 4 - 8 hours per week online completing lessons,
practice quizzes, and participating in class discussions. Finally, you may
want to incorporate these tips to help you get started:
 Set yourself a schedule -- check the course web site early in the
class week to see what tasks you'll need to work on for the week.
 Become very familiar with the site and how to use it. It is a tool to
help you learn!
 Team up with your classmates to discuss class assignments and
questions you might have.
 Ask questions when you need answers. If you have problems,
contact your instructor ASAP! I will help you come up with a
solution!
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Topics and Learning Outcomes:
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Section 1: Introduction to Economics
 CHAPTER 1: Limits, Alternatives, and Choices
 At the end of this session students will be able to:
 Define economics and the features of the economic
perspective.
 Describe the role of economic theory in economics.
 Differentiate between macroeconomics and
microeconomics.
 Name the categories of scarce resources and summarize the
nature of the economic problem.
 Associate the typical production possibilities curve with
increasing opportunity cost and describe economic growth.
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CHAPTER 2: The Market System and the Circular Flow
 At the end of this session students will be able to:
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Distinguish between a command system and a market
system.
List the main characteristics of the market system.
Restate and answer the four fundamental questions a
market system must answer.
Explain the ability of a market system to adjust to change
and promote progress.
Describe the mechanics of the circular flow model.
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CHAPTER 3: Demand, Supply, and Market Equilibrium
 At the end of this session students will be able to:
 Define the law of demand.
 Differentiate between demand and quantity demanded.
 List the determinants of demand.
 Define the law of supply.
 Differentiate between supply and quantity supplied.
 List the determinants of supply.
 Explain market equilibrium.
 Explain how changes in demand or supply affect the
equilibrium price and quantity of a product.
 List examples of government interference (price floors,
price ceilings) in pricing.
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Chapter 5 Market Failure: A Role for Government
 At the end of this session students will be able to:
 Differentiate between public goods and private goods.
 Define allocative efficiency and productive efficiency.
 State the characteristics of public goods.
 Differentiate between positive and negative externalities.
 Explain methods used by government to correct
externalities.
 Explain various principles of taxation.
 Calculate marginal and average tax rates.
 Identify a progressive, proportional, or regressive tax
system.
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EXAM 1 covers chapters 1,2,3,5
Section 2: Basics of Microeconomics
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Chapter 4: Elasticity of Demand and Supply
 At the end of this session students will be able to:
 Calculate the price elasticity of demand.
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Interpret the coefficient of price elasticity of demand.
Define elastic demand, unitary elastic demand, and
inelastic demand.
Differentiate between perfectly elastic demand and
perfectly inelastic demand.
Associate the elasticity of demand with the effect a change
in product price has on total revenue.
List the determinants of demand and state examples.
Calculate the elasticity of supply.
Interpret the coefficient of price elasticity of supply.
Describe the importance of time on the elasticity of supply.
Calculate and interpret the income elasticity of demand
(normal or inferior goods).
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Chapter 6: Businesses and Their Costs
 At the end of this session students will be able to:
 List advantages of the corporation over proprietorships and
partnerships.
 Differentiate between explicit and implicit cost.
 Calculate economic profit.
 Differentiate between the short run and the long run in
economics.
 Describe the law of diminishing returns in the short run.
 Calculate short run production costs.
 Differentiate between fixed cost and variable cost.
 Describe marginal cost.
 Summarize the relation of marginal cost to average variable
cost, average total cost.
 Define the following long run terms: economies of scale,
constant returns to scale, diseconomies of scale.
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Chapter 7: Pure Competition & Chapter 8: Pure Monopoly
 At the end of this session students will be able to:
 List the characteristics of the four market models.
 Describe the characteristics and features of pure
competition.
 Describe the demand curve for the purely competitive firm.
 Define the rule for profit maximization in pure competition.
 Explain the short run shut down rule and loss minimization.
 Describe the short run supply curve for the purely
competitive firm.
 Determine the short run equilibrium price and output for
the firm in pure competition.
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Relate the importance of easy entry and exit of firms in
response to economic profit to long run equilibrium in pure
competition.
Describe the types of efficiency achieved in pure
competition.
Describe the characteristics of pure monopoly.
List various potential barriers to entry of new firms.
Describe monopoly demand.
Determine the profit maximizing price and output in
monopoly.
List the economic effects of monopoly.
Define and provide examples of price discrimination.
Relate monopoly and antitrust policy.
 Exam 2 covers chapters 4,6,7,8
Section 3: Labor Markets, Income Distribution, Basics of Macroeconomics
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Chapter 10: Wage Determination & Chapter 11: Income Inequality and
Poverty
 At the end of this session students will be able to:
 Calculate marginal revenue product and determine labor
demand.
 Determine the profit maximizing quantity of labor to
employ using the MRP=MRC rule.
 List the determinants of labor demand(MRP).
 Calculate the elasticity of demand for labor and interpret
the coefficient.
 List the determinants of the elasticity of demand for labor.
 Interpret a labor supply curve.
 Determine the equilibrium wage and the quantity of labor.
 List types of unionism.
 List reasons for wage differentials.
 List different methods of measuring income inequality.
 List causes of income inequality.
 List causes of growing inequality.
 Describe the case for equality and the case for inequality.
 Describe the extent of poverty in the United States.
 List government entitlement programs.
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Chapters 12 and 13: Introduction to GDP, Growth, and Instability, Chapter
13: Aggregate Demand and Aggregate Supply
 At the end of this session students will be able to:
 Define Gross Domestic Product.
 Calculate GDP.
 List the components of GDP.
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Compare the difference between nominal GDP and real
GDP.
Define economic growth.
Define the business cycle and the primary phases of the
business cycle.
Define the labor force.
Calculate the unemployment rate.
List and describe the types of unemployment.
Define full employment.
Define and interpret the GDP gap.
Define inflation and calculate the inflation rate.
Differentiate between demand-pull inflation and cost-push
inflation.
List the groups hurt by inflation and the groups benefited
by inflation.
Differentiate between a nominal interest rate and the real
interest rate.
List the determinants of aggregate demand.
List the determinants of aggregate supply.
Determine the equilibrium price level and real GDP.
Determine the effects of changes in aggregate demand
and/or changes in aggregate supply.
List reasons for downward price inflexibility.
EXAM 3 covers chapters 10,11,12,13,14
Section 4: Government and Economic Policy, International Trade
 Chapter 14: Fiscal Policy, Deficits and Debt
 At the end of this session students will be able to:
 Define fiscal policy.
 Define expansionary fiscal policy and the desired effects
through the aggregate demand/aggregate supply model.
 Define contractionary fiscal policy and the desired effects
through the aggregate demand/aggregate supply model.
 Determine the effects of fiscal policy on real GDP,
unemployment, and inflation.
 Identify potential built-in stabilizers.
 Define standardized budget.
 Define cyclical deficit.
 Define the timing problem associated with discretionary
fiscal policy and the potential lags in time.
 Define political business cycle.
 Define the crowding out effect of fiscal policy.
 Differentiate between budget deficits and the public debt.
 Identify false concerns of the rising public debt.
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Chapter 16: Money and Banking & Chapter 17: Monetary Policy
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Identify reasons for the upcoming Social Security funding
shortfall.
Identify potential policy options concerning Social
Security.
At the end of this session students will be able to:
 List and define the functions of the money supply.
 List the components of the M1 definition of the money
supply.
 List the M2 components of the money supply.
 Relate the purchasing power of money with the price level.
 Recall the structure of the Federal Reserve system.
 State the functions and responsibilities of the Federal
Reserve Bank.
 Define fractional reserve banking and money creation by
banks.
 Differentiate between required reserves and excess
reserves.
 Calculate the money multiplier and maximum checkable
deposit creation.
 List and define the types of money demand.
 Recognize the money demand curve.
 Determine the equilibrium interest rate in a money market.
 List and define the tools used by the Federal Reserve Bank
to conduct monetary policy.
 Differentiate between an easy money policy and a tight
money policy.
 Provide the effects of monetary policy on real GDP and the
price level.
 List the advantages and problems or complications of using
monetary policy.
 Define inflation targeting.
 Define open market operations.
 Define the discount rate.
 Define the federal funds rate.
 Define the prime interest rate.
Chapter 18: International Trade
 At the end of this session students will be able to:
 Define comparative advantage and the advantages of
specialization.
 Determine comparative advantage through the calculation
of opportunity cost.
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Determine the terms of trade.
Determine the gains from specialization and trade.
Define foreign exchange markets and interpret an exchange
rate.
Define appreciation and depreciation of a currency.
Determine the effects of depreciation or appreciation of a
currency on exports and imports.
List the determinants of exchange rates.
List and describe types of trade barriers.
List the economic effects of tariffs.
List the economic effects of quotas.
List arguments for protection.
List arguments for free trade.
Define the Smoot-Hawley Act.
Define dumping.
Define the Trade Adjustment Assistance Act.
Define the WTO and GATT.
List free-trade zones (European Union and NAFTA).
List causes and implications of U.S. trade deficits.
Final Exam covers chapters 15,16,17,18 and some material from the
previous three sections. More details on the final exam will be posted
later in the semester at the course website.
Student Learning Outcomes:
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Section 1: Students will learn basic economic concepts, terms, theory and
applications(chapters 1,2,3,5)
Section 2: Students will learn the basics of microeconomic theory, concepts and
applications(chapters 4,6,7,8)
Section3: Students will learn wage determination and the hiring decision, income equality
and inequality issues, and the basics of macroeconomic theory, concepts and
applications.(chapters 10,11,12,13, 14)
Section 4: Students will learn basics of government policy and the economy, focusing on
fiscal policy, debt, and monetary policy. Students will also learn the basics of
international trade theory, concepts and applications. (chapters 15,16,17,18)
Texts:
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Required texts: Essentials of Economics, second edition, Brue, McConnell, and
Flynn, McGraw Hill Irwin. There is also an etext available for this textbook. We
will use the textbook website for practice quizzes and study guides.
Recommended texts: The study guide is recommended but not required for the
Brue textbook.
Required Materials:
o Internet Access
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E-mail Account
Grading / Evaluation:
o The course grade will be determined as follows:
 3 exams: 16% each
 Final Exam: 30%
 Discussion and participation: 22% (graded by the active participation of
each student in the discussion forum)[email protected].
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All work must be submitted as scheduled. Late submissions will not be
accepted.
Extra credit may be earned in the course by completing some of the webbased questions located at the textbook website. Students will be asked to
go to a particular website and answer questions based on the information
provided at the website. Extra credit is optional and not part of the course
requirements. Extra credit work is considered when determining the final
course grade. I do not attach particular points to the work, but consider all
work submitted by each student when determining the final course grade.
Extra credit work should be submitted through the drop-box at the course
website.
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Special Technology Utilized by Students: This course is totally online. All instructional
content and interaction takes place over the WWW. In addition to baseline word
processing skills and sending/receiving email with attachments, students will be expected
to search the Internet and upload / download files. In addition, students may need one or
more of the following plug-ins:
o Adobe Acrobat Reader: http://www.adobe.com/products/acrobat/readstep2.html
o PowerPoint Viewer:
http://microsoft.com/downloads/details.aspx?FamilyId=D1649C22-B51F-491093FC-4CF2832D3342&displaylang=en
o Windows Media Player:
http://www.microsoft.com/windows/windowsmedia/download/
o Quicktime Player: http://www.apple.com/quicktime/download/
o Real Player:
http://forms.real.com/netzip/getrde601.html?h=207.188.7.150&f=windows/RealO
nePlayerV2GOLD.exe&p=RealOne+Player&oem=dl&tagtype=ie&type=dl
o Macromedia Flash Player:
http://macromedia.com/shockwave/download/download.cgi?P1_Prod_Version=S
hockwaveFlash
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Expectations for Academic Conduct/Plagiarism Policy:
o Academic Conduct Policy: (Web Format) | (PDF Format) | (RTF Format)
o Plagiarism Policy: (Word Format) | (PDF Format) | (RTF Format)
o Student Handbook: (PDF Format)
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ASSISTANCE:
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Students with special needs who require specific examination-related or other
course-related accommodations should contact Barbara Fitzpatrick, Director of
Disabled Student Services (DSS), [email protected], (850) 474-2387. DSS will
provide the student with a letter for the instructor that will specify any
recommended accommodations.