Download (SUPA) - Economics - Whitesboro Central School

Whitesboro Central School Curriculum
Econ 203 Economic Ideas and Issues
Mr. Klein (SUPA Economics Teacher)
Mr. Coriale (Project Facilitator, Social Studies Department Chair, Economics Teacher)
July 2014
Whitesboro/SUPA Economics Curriculum
July 2014
Overview: Syracuse University Project Advance is a cooperative program between Syracuse
University and your high school that allows high school students to enroll in Syracuse University
courses. Teachers who are also adjunct SU instructors teach these classes in the high school,
and they follow the curriculum and guidelines established by the University. The Project
Advance program enables high school students to gauge their ability to do college work prior to
full-time college study. Upon successful completion of a Syracuse University course, students are
awarded SU transcripts that record credits earned. These credits are transferable to hundreds of
colleges and universities nationwide. For more information about Syracuse University Project
Advance, visit www.supa.syr.edu. (Source:http://supa.syr.edu/index.php)
ECN 203 Economic Ideas and Issues: Syracuse University credit: 3 credits
Economic Ideas and Issues is an introduction to mainstream economic thought designed for
students with a liberal arts interest. The goals of this course are to introduce students to the
ideas that form the foundation of modern Western (neoclassical) economic thought, to examine
the basic framework (the model) that economists have built on this foundation, and to show
how this model is applied to current issues facing individuals and society.
The course begins with a presentation of the scientific method, which is then used to analyze
the question: How do individuals and societies make choices when they are faced with
scarcity? Beginning with the individual in the simplest of situations, a one-person society, the
course moves step by step to develop a model of a complex society based on division of labor
and exchange through markets. The process takes students from the microeconomic to the
macroeconomic level, emphasizing the connection between these two perspectives. Students
examine the benefits, as well as the problems, inherent in a market-oriented economy. The
course prepares students to analyze and understand the ongoing economic policy debate
between interventionists and non-interventionists.
The course is rigorous but not heavily mathematical. Students should understand basic
algebra and geometry. More importantly, they should be able to follow carefully reasoned
logical development of a theoretical model and to apply that model to their own experience.
ECN 203 provides an excellent opportunity to nurture that skill.
The course helps students to understand and to recognize the elements of economic theory, to
identify the peculiar roles of these elements, and to understand how they fit together. Although
its goal is not to study complexities of theory in great detail, students can expect to develop a
strong foundation in neoclassical analysis applicable to study in other fields and to everyday
life, as readers of newspapers and other news media, and as citizen participants in a
representative government.
Furthermore, ECN 203 is designed to help students understand “how the world works.” Of
course, along with economic forces there are social, political, ethical, and natural forces at
work. Economics is, however, a very important part of that story. To the extent that students
master the material presented in the course, they will have a solid foundation in mainstream
economic thought that can be applied to everyday experience and to further study in
economics or the social sciences.
(Source:http://supa.syr.edu/courses/details.php?courseid=694&streamid=&prev=89)
There is flexibility for this curriculum to be taught with various instructional strategies and
assessments as determined by the individual teacher. Although this curriculum is based on the
topics that are required by Syracuse University and certain mandates must be met, the teacher is
encouraged to “own” the course, adapting it and designing instruction to fit the needs of the
students and employ the instructional strengths of the teacher.
Common Core Standards: The SUPA curriculum will incorporate the following
Common Core Standards through varied instructional techniques, assessments, and activities.
1. CCSS-RH-11-12.1
2. CCSS-RH-11-12.2
3. CCSS-RH-11-12.3
4. CCSS-RH-11-12.4
5. CCSS-RH-11-12.5
6. CCSS-RH-11-12.6
7. CCSS-RH-11-12.7
8. CCSS-RH-11-12.8
9. CCSS-RH-11-12.9
10. CCSS-RH-11-12.10
11. CCSS-RST-11-12.2
12. CCSS-RST-11-12.6
13. CCSS-RST-11-12.7
14. CCSS-RST-11-12.8
15. CCSS-RST-11-12.9
16. CCSS-RST-11-12.10
17. CCSS-WHST-11-12.1a
18. CCSS-WHST-11-12.1b
19. CCSS-WHST-11-12.1c
20. CCSS-WHST-11-12.1d
21. CCSS-WHST-11-12.1e
22. CCSS-WHST-11-12.2a
23. CCSS-WHST-11-12.2b
24. CCSS-WHST-11-12.2c
25. CCSS-WHST-11-12.2d
26. CCSS-WHST-11-12.2e
27. CCSS-WHST-11-12.4
28. CCSS-WHST-11-12.7
29. CCSS-WHST-11-12.8
30. CCSS-WHST-11-12.9
31. CCSS-WHST-11-12.10
NYS Learning Standards: The SUPA curriculum will incorporate the following
NYS Learning Standards on a daily basis through varied instructional techniques, assessments,
and activities.

Social Studies 4: Economics

Social Studies 5: Civics, Citizenship, Government

ELA 1: Language for Information and Understanding

ELA 3: Language for Critical Analysis and Evaluation

ELA 4: Language for Social Interaction

MST 1: Analysis, Inquiry, and Design

MST 6: Interconnectedness: Common Themes

MST 7: Interdisciplinary Problem Solving
Curriculum Topics and Objectives
(The following curriculum objectives are based on the course text:
Principles of Economics: A Foundation for Understanding the Economy,
3rd Ed. (Evensky, J.) ISBN 1256702897
1.0 INTRODUCTION
1.1 GENERAL INTRODUCTION TO OUR STUDY
Learning targets:
1. Students will explain how an econosystem resembles an ecosystem.
2. Students will explain the following assertion: Economics is one tool in a social science
tool kit. Identify the other tools and describe how one hones his/her skills with these
tools.
3. Analyze and interpret the following statement: Economics is Truth.
1.2 THE SUBJECT OF ECONOMICS
Learning targets:
1. Students will be able to identify the fact of the human condition from which the study of
economic life begins.
2. Define opportunity cost.
3. Identify the one resource that is inevitably scarce for all individuals. Illustrate how its
scarcity confronts each individual and influences choice.
4. Explain the following assertion: Money is the great escape from scarcity.
5. Contrast the challenge of choice faced by individuals and that faced by society as a
whole.
6. Explain the relationship between scarcity and opportunity cost.
1.3 A PREVIEW OF THE STUDY
Learning targets:
1. Describe the subject of microeconomics.
2. Describe the subject of macroeconomics.
3. Contrast the subject of microeconomics and macroeconomics.
4. Identify what markets do well under the right conditions.
1.4 OUR METHOD FOR DEVELOPING THE MODEL
Learning targets:
1. Define vision (according to Schumpeter).
1. 2. Identify the steps in the process of model building. Describe and explain the
importance of each.
2. Identify two sources of problems in a model.
3. Identify the point at which ideology enters the scientific process.
4. Explain the effect of ideology on model building.
5. Explain why scientists adopt assumptions.
6. Indentify the relationship among strong assumptions, weak assumptions, and relaxed
assumptions.
7. Explain the value of starting analysis with strong assumptions and then relaxing them.
8. Define ceteris paribus and explain the assumption that is held constant.
Assessment:
Homework 1
2.0 MODELING INDIVIDUAL CHOICE
2.1 MODELING INDIVIDUAL CHOICE- OUR ASSUMPTIONS AND DEFINITIONS
Learning targets:
1. Identify the motive that we assume drives the choices of all individuals.
2. Define utility, rational economic behavior, consume, and goods and services
3. Explain the arrangement of the above terms as they are used in the model.
4. Define preference ordering.
5. Explain the assumption the model makes about an individual’s preference ordering.
2.2 DIMINISHING MARGINAL UTILITY
Learning targets:
1. Define margin.
2. Define marginal utility.
3. Explain diminishing marginal utility.
4. Explain why we assume perfect divisibility of units.
5. Explain what is meant by marginal analysis.
6. Calculate the total utility and marginal utility.
7. Interpret the pattern represented in the marginal utility graph.
2.3 CONSTRUCTING A DECISION RULE
Learning targets:
1. Explain the decision rule.
2. Define satiate.
3. Describe a bliss point.
4. Explain the purpose of starting out with such an unrealistic decision rule.
2.4 RELAXING OUR “NO SCARCITY” ASSUMPTION
Learning targets:
1. Define optimize.
2. Explain the concept: optimal allocation.
3. Describe how the utility maximizing decision rule changes as the no scarcity assumption
is relaxed.
4. Explain the only way one can maximize utility.
5. Explain the concept of a constrained optimization problem.
2.5 RELAXING OUR “NO PRODUCTION NECESSARY” ASSUMPTION
Learning targets:
1. Explain the relationship between society’s endowment and scarcity.
2. Define marginal product.
3. Explain diminishing marginal product.
4. Define value from the marginal product – V.
2.6 RELAXING OUR “NO FUTURE” ASSUMPTION
Learning targets:
1. Describe intertemporal choice.
2. Explain the concept of discounting the future.
3. Define, explain, and apply the discount rate.
4. Define present value.
5. Define saving and investing.
6. Explain the concept of time horizon and describe its relationship to sustainability.
2.7 RELAXING OUR “NO RISK AND UNCERTAINTY” ASSUMPTION
Learning targets:
1. Define risk.
2. Explain the impact of risk on decision-making.
3. Explain the concept of expected present value.
4. Define uncertainty.
5. Explain the difference between risk and uncertainty.
6. Explain how perceptions influence risk.
7. Identify the sources of our perceptions.
8. Describe how perception management can be used as a tool of government policy.
9. Describe how perception management can be used as a tool of private enterprise.
10. Demonstrate how socially developed perceptions of gender roles affect behavior
according to the model.
11. Explain how the model applies to a public or private use of media.
2.8 CONCLUDING OUR ANALYSIS OF INDEPENDENT INDIVIDUAL CHOICE
Learning targets:
1. Explain why when an isolated individual decides to produce, it is automatically a
decision to consume, and when he/she decides to invest, it is automatically a decision to
save.
2. Identify where an isolated individual's choice coordination system is located.
3. Identify what distinguishes the simple, isolated world of an individual from the world of
interdependence.
Assessment:
Homework 2
Exam 1
3.0 INTERDEPENDENT CHOICE AND MARKET
COORDINATION
3.1 FACTORS THAT GIVE RISE TO COMPLEXITY, INCLUDING THE DIVISION OF
LABOR AND THE GAINS FROM TRADE
Learning targets:
1. Explain why we give up the security of total independence for the vulnerability of
interdependence.
2. Explain the connection between social complexity and social productivity.
3. Explain the division of labor.
4. Identify the three reasons Adam Smith cites for the increased productivity from the
division of labor.
5. Identify a potential problem that the division of labor can generate.
6. Define surplus.
7. Explain why the division of labor gives rise to individuals holding surpluses.
8. Explain why the division of labor gives rise to exchange.
9. Identify the role of a coordination mechanism in a complex society.
10. Explain absolute advantage.
11. Explain comparative advantage.
12. Identify the condition that limits the division of labor.
13. Analyze how the development of “highways” of trade contributes to a society’s
productive capacity.
14. Describe the system of a traditional society.
15. Describe the system of a command economy.
16. Identify the role of markets in a “liberal” society.
17. Explain the concept of commutative justice, and describe the relationship between
commutative justice and sustainability in a liberal, free market society.
18. Identify the features of a liberal society under ideal conditions that make it such an
attractive system.
19. Describe John Stuart Mill’s conception of distributive justice.
3.2 THE ROLE OF MONEY IN MARKETS
Learning targets:
1. Describe the role of financial capital in a market system.
2. Define barter. Explain the problem with a barter system.
3. Define general equivalent.
4. Identify three roles of money.
5. Identify four characteristics of a general equivalent that would make it a good candidate
for money.
6. Define commodity money and fiat money.
3.3 HOW A MARKET WORKS
Learning targets:
1. Identify Adam Smith and The Wealth of Nations.
2. Explain and draw a fully labeled generic market picture.
3. Identify what the supply line in a market picture represents.
4. Identify what the demand line in a market picture represents.
5. Describe what functional form represents.
6. Explain the difference between demand and quantity demanded.
7. Draw a shift in demand.
8. Explain the difference between supply and quantity supplied.
9. Draw a shift in supply.
10. Explain and draw how the market adjusts to surplus and shortage, moving towards
equilibrium.
11. Define equilibrium.
12. Explain why disequilibrium is not a stable condition in a perfectly competitive market.
13. Identify the signal on which the entire market system depends.
14. Explain an administered price system and give an example.
15. Analyze the problems that arise with administered prices.
3.4 THE GENERAL MARKET SYSTEM
Learning targets:
1. Identify the two primary sets of players in the basic model of a complex society.
2. Explain the circular flow diagram and explain the interaction between the two sets of
players.
3. Describe the role of firms in the market system.
4. Identify the two basic kinds of markets. Explain how the market players participate in
each.
5. Describe the circular flow of real things.
6. Describe the circular flow of money.
7. Explain the relationship between the circular flow of real things and the circular flow of
money.
8. Explain the relationship between General Equilibrium and General Competitive
Equilibrium.
9. Explain why information is not costless.
10. Identify and explain a violation of the equal access to information assumption.
11. Identify and explain a violation of the equal access to the market assumption.
12. Describe how market power affects the character of the competition.
13. Explain market failure.
14. Explain what is meant by Pareto optimality.
15. Identify the standard for Pareto optimality.
4.0 THE PRODUCT MARKET DEMAND UNDER
PERFECT COMPETITION
4.1 INTRODUCTION
Learning targets:
1. Explain the necessary conditions for individuals to have demand
4.2 PRODUCT DEMAND
Learning targets:
1. Explain why a product demand line slopes down.
2. Explain what elasticity of demand measures.
3. Define: elastic demand.
4. Define: inelastic demand.
5. Give examples of elastic and inelastic demand.
6. Identify elastic demand vs. inelastic demand on a demand graph.
7. Explain why price elasticity is important for policy.
8. Explain how a firm might use price elasticity information.
9. Show graphically and describe the case of perfectly elastic demand.
10. Show graphically and describe the case of perfectly inelastic demand.
11. Explain elasticity of demand as it applies to necessities and luxuries.
12. Identify various factors and conditions that affect elasticity of demand.
13. Apply the equation economists use to represent the measure price elasticity.
14. Describe the relationship between price elasticity and total revenue.
15. Explain how the elasticity of demand can affect tax incidence and tax burden.
4.3 EXPANDING THE DEMAND RELATIONSHIP – IDENTIFYING THE SHIFT
VARIABLES
Learning targets:
1. Identify the shift variables in the product demand relationship.
2. Define: cross price elasticity of demand.
3. Apply the equation that measures the cross price elasticity of demand.
4. Define complements.
5. Understand the relationship between two goods that have a negative cross price elasticity,
6. Define substitutes.
7. Understand the relationship between two goods that have a positive cross price elasticity.
8. Draw and label market graphs for three related goods.
9. Analyze how a change in supply conditions for one good will affect the equilibrium price
and quantity exchanged in the markets for related goods.
10. Define normal good.
11. Define inferior good.
12. Apply the equation for income elasticity.
13. Identify the sign of the income elasticity equation for a normal good and an inferior good.
14. Apply the difference between demand and market demand.
15. Construct a market demand line.
16. Apply graphically cases of entry and exit on the demand side of the product market.
17. Identify factors that can cause entry and exit and strongly affect product market demand.
Assessment:
Homework 3
5.0 PRODUCT MARKET SUPPLY
5.1 PRODUCT SUPPLY
Learning targets:
1. Draw a generic marginal product curve.
2. Explain how the marginal cost curve is derived from the marginal product curve.
3. Identify the level of productivity an input has achieved when the marginal cost of the
product it is making is at its lowest level.
4. Identify the level of cost a production process has achieved when the marginal
productivity of the variable input is at its highest level.
5. Explain what the upward sloping section of the firm’s marginal cost curve is.
6. Describe the costs represented by the marginal cost line.
7. Define normal return.
8. Identify the variables that go into a firms cost structure.
9. Describe the relationship between the firms' supplies for a given good or service and the
market supply for that good or service.
10. Construct the market supply line.
11. Apply graphically cases of entry and exit on the supply side of the product market.
12. Describe the elasticity of demand faced by a firm in a perfectly competitive market.
6.0 REPESENTING THE POWER OF THE INVISIBLE
HAND IN THE PRODUCT MARKET
6.1 THE MAGIC OF MARKETS – PRODUCT MARKET EFFICIENCY UNDER OUR
NICE ASSUMPTIONS
Learning targets:
1. Define marginal cost.
2. Define average cost.
3. Describe the relationship between marginal and average cost.
4. Explain the relationship when the margin is above the average and when the margin is
below the average.
5. Explain the relationship between the marginal cost curve and the average cost curve.
6. Draw an AC curve and MC curve when given one or the other.
7. Define total revenue.
8. Define total cost.
9. Define profit is.
10. Explain how a firm can operate without a profit.
11. Analyze graphically how the market dynamic drives production to the most efficient
method.
6.2 MARKETS, PERFECT COMPETITION, CREATIVITY, AND MATERIAL
PROGRESS
Learning targets:
1. Describe how the perfectly competitive market encourages innovation and creativity.
2. Describe the role of an entrepreneur in the market system.
3. Describe two ways an entrepreneur can use creativity to “get ahead.”
4. Describe the constant challenge facing an entrepreneur in a perfectly competitive market.
5. Describe the power of the “invisible hand.”
6. Explain how the market system affects efficiency and equity.
Assessment:
Homework 4
Exam 2
7.0 THE FACTOR MARKET
7.1 THE FACTOR MARKET – INTRODUCTION
Learning targets:
1. Explain the roles of individuals and firms in the factor market and in the product market.
2. Describe the relationship between factor markets and individuals’ incomes.
3. Identify the factors of production.
4. Explain the difference between physical and human capital.
5. Define process of production.
6. Explain the allocation of a factor.
7. Define technique and technology and the relationship between these concepts.
8. Compare labor intensive and capital intensive techniques.
9. Define goods and services.
10. Analyze graphically how the labor market adjusts to en excess supply of labor and an
excess demand of labor.
7.2 FACTOR MARKET SUPPLY
Learning targets:
1. Explain why the supply curve for a factor slopes upward.
2. Identify the variables that cause a shift in factor supply.
3. Explain sunk costs.
4. Describe the role of sunk costs in decision-making.
5. Describe how labor mobility creates connections among the factor markets.
7.3 FACTOR MARKET DEMAND
Learning targets:
1. Explain why firms buy factors.
2. Define derived demand.
3. Explain the value of the marginal product (VMP) and how it is calculated.
4. Explain why the demand curve for a factor slopes down.
5. Identify the variables the cause a shift in factor demand.
6. Explain how (ceteris paribus) an increase in product demand will affect the derived
factor demand.
7. Define: input substitution, labor intensive technique, and capital intensive technique.
8. Explain the elasticity of input substitution.
9. Explain how factor markets will adjust to changing relative prices of labor and capital.
Assessment:
Homework 5
8.0 GENERAL COMPETITIVE EQUILIBRIUM (GCE)
8.1 GENERAL EQUILIBRIUM THEORY
Learning targets:
1. Define general equilibrium theory.
2. Explain a simultaneous system.
3. Identify and describe four treads that weave markets into the web of a general system.
4. Identify the givens in general equilibrium theory.
5. Explain why general equilibrium theory is essential for representing economists’ vision
of the market system.
6. Define partial equilibrium analysis.
7. Analyze the role of partial equilibrium analysis and general equilibrium theory in modern
economics.
8.2 GENERAL COMPETITIVE EQUILIBRIUM (GCE)
Learning targets:
1. Describe the efficiency of a general competitive equilibrium.
2. Describe the equity or justice of a general competitive equilibrium.
3. Explain why if any individual market is still adjusting toward equilibrium, then all
markets are adjusting.
4. Explain the relationship between the distributive outcome of the market process and the
distribution of society's endowments among individuals.
5. Explain the standard by which economists measure the efficiency of general equilibrium.
6. Explain the concept of equity and explain why there is no scientific basis for setting a
standard of an optimal equity condition.
7. Explain the role of commutative justice in a market system.
9.0 MARKET POWER, MARKET FAILURE, AND
GENERAL EQUILIBRIUM
9.1 INTRODUCTION TO MARKET POWER AND MARKET FAILURE
Learning targets:
1. Explain the relationship between the concepts of general competitive equilibrium and
general equilibria.
2. Identify the unique characteristic of a general competitive equilibrium that distinguishes
it from all other general equilibria.
9.2 MARKET POWER
Learning targets:
1. Describe and explain the efficiency and equity effects of market power.
2. Explain the benefit of market power.
3. Explain the costs of market power.
4. Define monopoly and monopsony.
5. Identify the source of naturally occurring market power and explain its relationship to
commutative justice.
6. Identify examples of naturally occurring market power.
7. Explain scale of production and returns to scale.
8. Define economies of scale.
9. Explain economies can create natural market power.
10. Explain how natural market power can erode.
11. Explain what is meant y artificial market power.
12. Analyze the purpose of patents.
13. Define rent-maintenance activity.
14. Define rent-seeking activity.
15. Explain the possible connection between rent-seeking/maintenance activity and
contributions to political groups.
16. Explain how socialization connects to markets.
17. Explain how socialized perceptions can reduce your range of choices and limit access to
the market.
18. Explain the consequence of any institutional constraints, social and/or political.
19. Analyze the equity and efficiency implications of market power.
9.3 MARKET FAILURE
Learning targets:
1. Describe market failure.
2. Explain what public goods are.
3. Explain why many goods are not pure public goods.
4. Give examples of pure public goods.
5. Describe the free rider problem.
6. Identify the role of property rights in a market society.
7. Define externalities and identify the general cause of externalities.
8. Analyze positive and negative externalities.
9. Explain graphically positive and negative externalities.
10. Define a risk externality.
Assessment:
Project 1
Homework 6
10.0 THE MICROECONOMY AND GOVERNMENT
10.1 INTRODUCTION
Learning targets:
1. Identify the possible roles for government in the micro market economy.
2. Identify the two principles that underlie the debate about the role of government in the
economy.
10.2 GOVERNMENT INTERVENTION IN THE MICROECONOMY – CASES AND
ISSUES
Learning targets:
1. Explain the concept of internalizing an externality.
2. Define proxy.
3. Explain why government intervention in an externality problem is a real and significant
challenge.
10.3 GOVERNMENT INTERVENTION AND EFFICIENCY – THE PHILOSOPHICAL
DEBATE
Learning targets:
1. Identify the distinguishing characteristics of a coherent policy.
2. Identify and explain the philosophical questions that must be answered to determine what
role government should play in a microeconomy.
3. Explain laissez-faire.
4. Analyze the policy perspectives of a non-interventionist and an interventionist.
10.4 DISTRIBUTIVE JUSTICE AND THE ROLE OF GOVERNMENT
Learning targets:
1. Identify the most fundamental problem of government intervention in the name of equity.
2. Explain why achieving a consensus on a definition of equity is a significant challenge.
3. Explain why the government faces the problem of implementing a policy that will realize
equity.
4. Explain the objectives and the problems of a rent control policy.
5. Explain the efficiency/equity trade-off.
Assessment:
Mid-Term Exam (Provided by Syracuse University)
11.0 INTRODUCTION TO MACROECONOMICS
11.1 OVERVIEW
Learning targets:
1. Explain why we study the economy at a macro level.
2. Identify the difference between micro and macro perspectives.
3. Identify the four basic aggregate questions the macroeconomic model is designed to
explore.
11.2 DEFINING TERMS
Learning targets:
1. Define Gross Domestic Product.
2. Define full sustainable capacity (potential) GDP and Actual GDP.
3. Identify the condition at which the microeconomy must be functioning if the
macroeconomy is performing at full sustainable capacity (potential) GDP.
4. Explain why GDP is not an effective measure of general social welfare.
5. Define the labor force.
6. Explain what is meant by voluntarily unemployed.
7. Explain employed, unemployed, unemployment rate.
8. Identify the three different kinds of unemployment.
9. Explain why frictional and structural unemployment does not result from a lack of jobs.
10. Explain why frictional unemployment and structural unemployment are part of a
dynamic, growing, healthy economy.
11. Explain the natural rate of unemployment.
12. Define demand deficient unemployment.
13. Describe the kinds of costs demand deficient unemployment imposes on society.
14. Define inflation.
15. Define deflation.
16. Distinguish a macroeconomic change in the price level from a microeconomic relative
price adjustment.
17. Identify and explain the efficiency and the equity costs that inflation or deflation impose
on an economy.
18. Explain hyperinflation and how it affects an economy.
19. Define indexing and describe how people use indexing to protect themselves from
inflation.
20. Explain the difference between nominal and real values.
21. Explain why real values are useful for comparisons of economic data over time and
nominal values are not.
22. Identify the two methods the government uses to measure the price level.
23. Explain what the CPI is and how it’s determined.
24. Distinguish the scope of the CPI and the GDP Deflator.
Assessment:
Homework 7
12.0 THE BASIC MACRO MODEL
12.1 INTRODUCING OUR MACRO PICTURE
Learning targets:
1. Draw and label the Macro Picture and identify YF, AD, AS, the current level of real GDP
(Y*) and the current price level (P*).
2. Show cases of an AD and AS shift, and interpret what is happening to the price level and
real GDP as the line shifts.
12.2 AGGREGATE DEMAND
Learning targets:
1. Define aggregate expenditure. Describe the relationship between aggregate expenditure
and aggregate demand.
2. Identify the relationship that the AD line represents and explain why the AD line slopes
down.
3. Explain graphically how the AD line will shift if AE increases, and if AE decreases.
4. Identify the six components of AE.
5. Explain why in the AE equations, some variables are preceded by a plus sign (+) while
others are preceded by a minus sign (-).
6. Identify what (G-T) stands for.
7. Identify what (X-M) stands for.
8. Explain graphically how a dramatic fall in investment (I) contributed to the Great
Depression.
9. Explain graphically how a dramatic rise in military spending by the government shifted
the economy from high unemployment of the Depression to very low unemployment.
10. Explain why the above shift in AD did not cause inflation during World War II.
12.3 AGGREGATE SUPPLY
Learning targets:
1. Explain the long run.
2. Identify the condition of the microeconomy when the economy has reached the long run.
3. Identify the level of real GDP in the macroeconomy when the long run condition has
been reached.
4. Explain graphically the position of the LAS.
5. Define very long run and identify changes that can occur in the very long run that shift
LAS.
6. Describe the sustainability challenge posed by economic growth.
7. Define short run and identify the variables that are constant in the short run.
8. Explain graphically the shape of the short run aggregate supply (AS) line.
9. Explain the term “slack” with respect to the macro economy.
10. Describe what the AS line represents.
11. Identify what is assumed constant along a given AS line.
12. Identify the shift variables with respect to the AS line.
12.4 COMBINING AD, LAS, and AS
Learning targets:
1. Explain graphically the effect of increasing unemployment due to falling aggregate
demand.
2. Explain graphically the effect of falling unemployment and falling price level as AS
shifts down due to falling factor prices.
3. Explain graphically the effect of increasing unemployment and increasing price level as
AS shifts up due to rising factor prices.
4. Explain graphically the case of effect unemployment and rising price level due to
increasing AD.
5. Define tight labor market and describe how such a labor market condition affects the
negotiating position of workers.
6. Define wage-price spiral.
7. Describe how a tight labor market might lead to a wage-price spiral.
8. Explain why workers ask for indexed wages in the face of a wage-price spiral.
Assessment:
Homework 8
Exam 3
13.0 AGGREGATE DEMAND
13.1 CONSUMPTION
Learning targets:
1. Identify the basis on which the average individual determines his/her level of
consumption.
2. Explain the concept of “smoothing out” consumption over time.
3. Define permanent income. Describe the relationship between permanent income and
consumption.
4. Describe personal financial planning.
5. Identify the source of aggregate income in the economy and how we measure it.
6. Explain the “b(P*Y)” in the consumption equation.
7. Define autonomous consumption.
8. Explain how consumer confidence affects the aggregate level of consumption.
9. Describe the wealth effect and its role in determining the aggregate level of
consumption.
13.2 INVESTMENT
Learning targets:
1. Identify the market in which the level of investment is determined.
2. Explain why people go to the long-term capital market for investment funds.
3. Define financial capital and distinguish financial capital from real, production capital.
4. Explain why financial capital is often referred to as liquidity.
5. Describe the role of, and identify financial intermediaries in the capital market.
6. Explain why the market in which financial capital is exchanged for real investments is the
long-term capital market.
7. Draw and label a long term capital market picture.
8. Explain why the long-term capital supply line slopes up.
9. Explain why the long-term capital demand line slopes down.
10. Explain the role of expectations in the long-term capital demand.
11. Explain expected rate of return.
12. Explain the relationship that must exist between the expected rate of return and the
interest rate for an investment to make sense.
13. Ceteris paribus, show how a specified shift of either supply or demand in the long-term
capital market changes the level of investment.
14. Describe how perceptions of risk of default affect interest rates.
15. Describe the relationship between short-term interest rates and long-term interest rates.
16. Identify the premiums that are added on to the short rate line to establish long rates.
17. Identify the three factors that determine the level of long-term capital supply.
18. Ceteris paribus, describe how a specified change in the short rate capital supply and/or
inflationary expectations will shift the long-term capital supply line.
19. Explain graphically how entry into a country’s capital market will shift the capital supply
line.
20. Explain graphically how exit from a country’s capital market will shift the capital supply
line.
21. Describe the relationship between domestic wealth accumulation and entry or exit into a
nation’s capital market.
22. Define international capital flows.
23. Explain the relationship between international capital flows and entry or exit into a
nation’s capital market.
24. Explain why international capital flows are often the most volatile source of entry or exit.
25. Explain why international capital flows are playing a bigger and bigger role in the
economies of individual nations.
26. Describe the conditions that, ceteris paribus, lead to flows of international capital into a
country.
27. Describe the conditions that, ceteris paribus, lead to flows of international capital out of a
country.
28. Explain the concept of foreign direct investment.
29. On appropriately labeled graphs, ceteris paribus, show how an international capital flow
into a country affects that country’s capital market and in turn its macroeconomy.
30. On appropriately labeled graphs, ceteris paribus, show how an international capital flow
out of a country affects that country’s capital market and in turn its macroeconomy.
31. Explain the effect of expectations on capital market demand.
32. On an appropriately labeled graph, ceteris paribus, show how increasingly positive
expectations shift the capital market demand line.
33. On an appropriately labeled graph, ceteris paribus, show how increasingly negative
expectations shift the capital market demand line.
13.3 THE TRADE BALANCE
Learning targets:
1. Explain why international trade exists.
2. Explain the process of currency exchange.
3. Explain why most international trade requires exchange of currencies.
4. Identify the market in which nations’ currencies are exchanged.
5. Explain what it means for a currency’s value to be allowed to “float” in the foreign
exchange market.
6. Describe the relationship between the two exchange rates: euros/dollar and dollars/euro.
7. Given the euros/dollar exchange rate, identify the dollars/euro exchange rate.
8. Describe what it means for a currency to appreciate or to depreciate.
9. Explain graphically how a shift out in the demand for financial capital in the United
States affects U.S. interest rates, and how this in turn affects the dollar exchange rate, the
trade balance, the aggregate demand and the macroeconomy.
10. Describe a global financial panic and the kinds of events that can lead to a panic.
13.4 THE GOVERNMENT’S BUDGET POSITION
Learning targets:
1. Identify the conditions that determine the government’s budget position.
2. Explain how the U.S. budget is determined.
3. Identify and explain how parties that are not officially part of the budget position try to
influence the budget process.
4. Explain how unfolding events can dramatically shape budget decisions.
Assessment:
Homework 9
14.0 AGGREGATE SUPPLY AND THE MICRO
FOUNDATIONS OF MACRO
14.1 SOURCES OF AGGREGATE SUPPLY SHIFTS
Learning targets:
1. Identify the source of shifts in the short run aggregate supply line.
2. Give an example of an event that would shift AS and graphically illustrate how the event
you’ve described would affect the macroeconomy.
14.2 TRANSISTION TO POLICY
Learning targets:
1. Explain graphically two kinds of macro shocks that can lead to unemployment.
2. Identify the micro conditions that ensure that the macroeconomy will move back to full
employment.
3. Identify the micro conditions under which the macroeconomy can get stuck in a less than
full employment position.
Assessment:
Exam 4
15.0 POLICY: THE PROMISE AND THE PROBLEMS
15.1 BACKGROUND TO POLICY DEBATE, THE MICRO/MACRO CONNECTION
Learning targets:
1. Explain graphically the micro condition that must exist when there is demand deficient
unemployment in the macroeconomy.
2. Explain how micro factor market adjustments eliminate macro demand deficient
unemployment.
3. Explain graphically the micro condition that must exist when there is inflationary
pressure in the macroeconomy.
4. Explain graphically how micro factor market adjustments eliminate macro inflationary
pressure.
5. Explain the possible macro consequences if micro assumptions are strong assumptions.
6. Describe and explain the polar case positions in the debate over government economic
policy.
15.2 THE PROMISE AND THE PROBLEMS
Learning targets:
1. Describe most economists’ image of the ideal long run and very long run conditions in
the macroeconomy.
2. Describe how most economists envisioned macro shocks until the 1970s. Identify the
assumptions that underlay this view.
3. Explain graphically the Phillips curve.
4. Explain graphically the conditions that lead to a wage-price spiral.
5. Explain graphically the conditions that lead to stagflation.
6. Identify the three basic dimensions of macro policy.
7. Identify the fundamental, philosophical difference of opinion that lies at the heart of the
macro policy debate.
16.0 MONETARY POLICY
16.1 THE INSTITUTIONAL CONTEXT
Learning targets:
1. Define monetary policy.
2. Identify the institution that manages monetary policy in most countries.
3. Identify the institution that manages monetary policy in the United States.
4. Describe the institutional position of the FED in the U.S. government.
5. Describe the appointment process of members of the Fed, the components of the FED
Board, and the components of the FED Chair.
6. Identify the voting membership of the Federal Open Market Committee.
7. Distinguish the FED from the U.S. Treasury Department.
8. Describe how the Treasury Department gets the funds to pay the government’s bills if the
government’s tax revenues are not sufficient to pay those bills.
9. Explain the relationship between the components of a treasury security.
10. Explain the role of financial intermediaries in the financial system.
11. Give an example of a financial intermediary and explain how financial intermediaries
make a return from the business they do.
12. Define asset, liability, and portfolio.
13. Define liquidity and give and examples of liquid assets.
14. Define reserves.
15. Explain why financial institutions need to hold some of their assets in a liquid form.
16. Explain the fractional reserve system.
17. Explain the benefits a fractional reserve system brings to an economy.
18. Explain the down side of a fractional reserve system.
19. Explain how a run on the financial system can get started
20. Explain the purpose of reserve requirements.
21. Identify the tools the FED uses to try to keep the U.S. financial system responsible.
22. Explain the role of the Federal Deposit Insurance Corporation.
16.2 THE IMPLEMENTATION OF MONETARY POLICY
Learning targets:
1. Describe what the FED does when it engages in open market operations.
2. Explain the relationship between FED open market operations and the level of reserves in
the financial system.
3. Explain excess reserves.
4. Describe how the FED can create excess reserves in the financial system.
5. Describe the response of banks that are holding excess reserves.
6. Identify the market through which banks exchange reserves.
7. Explain Federal Funds Rate.
8. Explain how the FED Open Market activity can lower the FED Funds Rate.
9. Explain how the FED Open Market activity can raise the FED Funds Rate.
10. Describe the relationship between FED Open Market Operations and the amount of
liquidity in the financial system.
11. Explain the Discount Rate and explain how it is used as a monetary policy tool.
12. Explain the role of the Reserve Requirement in FED policy.
16.3 POLICY ISSUES – FINANCIAL CRISES
Learning targets:
1. Describe the relationship between real values and asset values in a speculative bubble.
2. Explain how a speculative bubble gets started and expands.
3. Explain the source of and the role of speculation in a speculative bubble.
4. Explain how a speculative bubble might burst.
5. Explain how the bursting of a speculative bubble can have effects on the real economy.
6. Explain the role the FED can play in keeping a bursting speculative bubble from
becoming a real economic disaster.
7. Explain the interventionist and the non-interventionist positions with respect to the FED
in a financial crisis.
16.4 POLICY ISSUES – AGGREGATE DEMAND MANAGEMENT
Learning targets
1. Describe the relationship between the FED’s Open Market Operations, the FED Funds
Rate, and the long-term capital supply line.
2. Explain graphically how the FED can intervene in the economy to stimulate the economy
and reduce unemployment.
3. Explain graphically how a non-interventionist argues that intervention is not necessary to
fix a less than full employment problem in the economy.
4. Explain the arguments that interventionists and non-interventionist make in regards to
interventionist monetary policy.
5. Describe the role that different assumptions about the structure of the economy play in
the interventionist versus non-interventionist debate.
6. Identify the different structural assumptions often made by interventionists versus noninterventionists with respect to the natural rate and the shape of the AS line.
7. Explain graphically how, ceteris paribus, a FED intervention to stimulate the economy
can, ceteris paribus, affect the trade balance and in turn, Aggregate Demand and the
entire macroeconomy.
8. Explain graphically how, ceteris paribus, a FED intervention to contract the economy
can, ceteris paribus, affect the trade balance and in turn Aggregate Demand and the entire
macro economy.
9. Identify the policy the FED would pursue to stimulate the economy.
10. Identify the danger if the FED over stimulates the macroeconomy.
11. Explain the problem with imposing a wage-price freeze on a market economy.
12. Describe how the Paul Volcker-led FED squeezed inflation out of the economy.
13. Explain what a gold standard is.
Assessment:
Homework 10
Project 2
17.0 FISCAL POLICY
17.1 THE INSTITUTIONAL CONTEXT
Learning targets:
1. Define fiscal policy.
2. Identify expansionary and contractionary Fiscal Policy Tools.
3. Explain how, ceteris paribus, a budget surplus affects the macroeconomy.
4. Explain how, ceteris paribus, a budget deficit affects the macroeconomy.
5. Explain the role of Treasury bonds in the government budget process.
6. Explain what a government default is and describe the impact of such a default.
17.2 THE IMPLEMENTATION OF FISCAL POLICY
Learning targets:
1. Explain how an expansionary fiscal policy affects the macroeconomy.
2. Explain how a contractionary fiscal policy affects the macroeconomy.
3. Explain how the government budget can be used to stimulate the economy.
4. Explain how the government budget can be used to contract the economy.
5. Explain and show graphically how a stimulative fiscal policy can generate inflation.
6. Explain the difference between a deficit and debt.
7. Explain the government’s process of collecting revenue and financing deficits.
8. Explain graphically how increasing government borrowing affects private investors’
participation in the capital market and the level of private investment.
9. Define the crowding-out effect.
10. Explain graphically how government activity in the capital market can affect the
exchange rate and the trade balance.
11. Explain how the FED can monetize the deficit and how that eliminates the problems of
crowding out.
12. Explain the dangers of the FED monetizing the deficit.
13. Understand and explain the various Fiscal Policy arguments made the interventionists
and non-interventionists.
Assessment:
Homework 11
18.0 TRADE POLICY
18.1 TRADE POLICY TOOLS
Learning targets:
1. Explain why global economic analysis is fundamentally different from national economic
analysis.
2. Define open economy macro.
3. Identify the condition that makes trade policy more complex than monetary or fiscal
policy.
4. Explain why global economic relations are a strategic game among nations.
5. Explain how adopting different domestic policies regarding acceptable production
conditions can create advantages or disadvantages in the global market place.
6. Describe ways in which a nation can generate a positive trade balance through
developing a competitive edge.
7. Describe ways in which a nation can generate a positive trade balance through trade
restrictions.
8. Describe how a nation can generate a positive trade balance by manipulating its currency.
9. Describe how a nation can use a quota as a trade policy tool.
10. Describe how a nation can use a tariff as a trade policy tool.
11. Explain how a tariff can start a trade war.
18.2 TRADE POLICY ISSUES
Learning targets:
1. Explain the concept of a zero sum game.
2. Explain the Mercantilist view of how to expand the wealth of a nation.
3. Identify the kinds of policies prescribed by Mercantilism, and explain the logic of these
policies.
4. Explain the concept of a positive sum game.
5. Identify and explain the problems of a global liberal system.
6. Describe why governments often find Mercantilist policies politically attractive and why
such policies can lead to poor global relations.
7. Explain protectionism and the political dynamics that lead to such policies.
8. Explain how a trade war can hurt all participants.
9. Identify the challenges facing developing nations in the global economy.
10. Describe the role of the IMF in the global economy.
11. Describe the role of the WTO in the global economy.
12. Identify and explain an inherent weakness in any trade organization or agreement, such as
the WTO.
13. Explain the benefits and the cost of going to a common currency like the euro.
Assessment:
Homework 12
Exam 5
19.0 CONCLUSION
19.1 SOME HISTORICAL BACKGROUND ON THE INTERVENTIONIST VERSUS
NON-INTERVENTIONIST DEBATE
Learning targets:
1. Explain Say's Law.
2. Describe how Say's Law relates to the interventionist vs. non-interventionist debate.
3. Describe the interventionist vs. non-interventionist debate between Ricardo and Malthus:
4. Explain Ricardo's assumption, logic, and policy. Describe Malthus' critique of Ricardo's
position.
5. Explain the impact of Ricardo's Principles of Political Economy on the interventionist vs.
non-interventionist debate in mainstream economic theory.
6. Identify where Keynes saw strength and where he believed he saw a flaw in the
mainstream, orthodox economic theory he inherited.
19.2 WHY CAN'T ECONOMISTS RESOLVE THIS DEBATE ONCE AND FOR ALL:
THE PROBLEM OF TESTING
Learning targets:
1. Explain why there are multiple views of the economic process within mainstream
economics and why no one view is able to prevail.
2. Explain why a theoretical model must be operational in order for it to be tested.
3. Identify the problems one faces when theoretical definitions are transformed into
technical definitions.
4. Explain how this problem contributes to the inability of scientists to falsify models and
thus makes it possible for competing models to coexist.
5. Explain the technical criteria for being in the labor force.
6. Explain the technical criteria for being counted as employed.
7. Define discouraged worker and underemployed.
8. Explain what is calculated in the GDP.
9. Explain the underground economy.
10. Identify an exception the government makes to its own criteria for the technical definition
of GDP.
11. Explain what a proxy variable is and why they are used.
12. Explain how a model is specified in order for regression analysis to be performed.
13. Explain how the ability to manipulate the test contributes to the inability of scientists to
falsify models and thus makes it possible for competing models to coexist.
Assessment:
Final Exam (Provided by Syracuse University)
Terms and Vocabulary (Perceived vocabulary that students have not had
previously)
1. Absolute advantage
2. Aggregate demand
3. Aggregate supply
4. Allocate
5. Asset
6. Barter
7. Capital
8. Ceteris paribus
9. Commodity
10. Comparative
advantage
11. Deflation
12. Derived demand
13. Diminishing
14. Disequilibrium
15. Distributive Justice
16. Economies of Scale
17. Elasticity
18. Endowment
19. Equilibrium
20. Exports
21. Externality
22. Fiat
23. Fiscal
24. Frictional
Unemployment
25. Gross Domestic
Product
26. Hyperinflation
27. Indexing
28. Inferior
29. Inflation
30. Interest
31. IMF
32. Intertemporal
33. Interventionist
34. Invest
35. Invisible hand
36. Labor
37. Laissez-faire
38. Liability
39. Liberal Market
40. Liquidity
41. Macroeconomics
42. Margin
43. Marginal
44. Market
45. Mercantilism
46. Microeconomics
47. Monetary
48. Monetization
49. Monopoly
50. Monopsony
51. Moral
52. Multivariate
regression
53. Natural Rate of
Unemployment
54. Negative sum game
55. Nominal
56. Non-interventionist
57. Open market
operations
58. Operationalizing
59. Opportunity cost
60. Pareto optimality
61. Phillips curve
62. Portfolio
63. Positive sum game
64. Protectionism
65. Proxy
66. Quota
67. Recession
68. Rent seeking
69. Returns to scale
70. Say’s law
71. Scarcity
72. Specialization
73. Stagflation
74. Structural
unemployment
75. Surplus
76. Sustainability
77. Tariff
78. Underemployed
79. Utility
80. Wage price spiral
81. WTO
82. Zero sum game
Additional Topics
THE FOLLOWING TOPICS WILL BE ADDRESSED IF TIME ALLOWS. THEY
CORRESPOND WITH THE WHITESBORO ECONOMICS 12 CURRICULUM
(CHAPTERS 8 AND 11 RESPECTIVELY). THEY ARE NOT REQUIRED BY
SYRACUSE UNIVERSITY AS PART OF THE SUPA COURSE.
A-1 FINANCIAL MARKETS/PERSONAL FINANCE
Learning Targets:
1. Define investing.
2. Define risk as it applies to savings and investing.
3. Explain the various investment options and the risk associated with each (savings,
insurance, pensions, IRA, mutual funds, treasury bonds, corporate bonds, municipal
bonds, stocks).
4. Define portfolio and prospectus.
5. Explain the difference between compounded interest and simple interest.
6. Explain how stock markets work.
7. Explain what a stock index is.
8. Explain day trading.
9. Understand credit.
10. Explain what is meant by credit score and credit rating.
11. Explain how a credit card works.
12. Explain the difference between fixed and variable rate loans.
13. Understand how the prime rate affects interest rates.
14. Define mortgage.
15. Analyze the best time to get a variable rate or a fixed rate loan.
A-2 BUSINESS ORGANZIATIONS
Learning targets:
1. Explain the following organizations:
a. Sole Proprietorships
b. Partnerships
c. Corporations
d. Franchises
e. Non profits
f. Co-ops
g. Trade associations
2. Define liability.
3. Analyze the benefits and disadvantages of each business organization.
SUPA Economics 203 Course Outline
TOPIC
APPROXIMATE LENGTH
Microeconomics
Chapter 1 – Introduction to Economics
 Limits of Economics
 Scarcity
 Micro vs. Macro
 Developing the Model
1 Week
Chapter 2 – Modeling Individual Choice
 Assumptions
 Diminishing Marginal Utility
 Decision Rule
 Relaxing Assumptions
1 Week
Chapter 3 –Interdependent Choice and Market Coordination
 The Division of Labor and Trade
 The Role of Money in the Market
 The Market System
2 Weeks
Chapter 4 – Product Market Demand Under Perfect Competition
 Product Demand
 Demand Elasticity
 Shift Variables
2 Weeks
Chapter 5 –Product Market Supply Under Perfect Competition
 Product Supply
 Marginal Cost and Firm’s Cost Structure
 Shift Variables
1 Week
Chapter 6 – Representing the Power of the Invisible Hand
 Marginal and Average Costs
 Total Revenue, Total Cost, and Profit
 Incentive and The Magic of Markets
.5 Week
Chapter 7 – The Factor Market
 The Factor Market and the Factors of Production
 Factor Market Supply
 Factor Market Demand
Chapter 8 – General Competitive Equilibrium
 General Equilibrium
 General Competitive Equilibrium
1 Week
.5 Week
Chapter 9 – Market Power, Market Failure, and General Equilibrium
 Market Power and Market Structures
 Rent-Seeking
 Market Power and Social Institutions
 Market Failure
 Public Goods and Free Riders
 Externalities
1 Week
Chapter 10 – The Microeconomy and the Government
 The Policy Debate
 Government Intervention-Cases and Issues
 Government Intervention-The Philosophical Debate
 Distributive Justice and the Role of Government
1 Week
Macroeconomics
Chapter 11 – Introduction to Macroeconomics
 The Macroeconomic Perspective
 Unemployment
 GDP
1 Week
Chapter 12 – The Basic Macro Model
 Aggregate Demand
 Aggregate Supply
1 Week
Chapter 13 – Aggregate Demand
 Consumption
 Investment and Capital Markets
 Trade Balance
 International Capital Flows
 Exchange Rates
 Government Budget Position
2 Weeks
Chapter 14 – Aggregate Supply and the Transition to Policy
 Sources of Aggregate Supply Shifts
 Transition to Policy
.5 Week
Chapter 15 – Policy: The Promise and the Problems
 Macroeconomic response to Unemployment
 Macroeconomic response to Inflation
 Macroeconomics and the Invisible Hand
 The Promise
.5 Week
Chapter 16 – Monetary Policy
 The Fed
 Banks
 Fractional Reserves
 Monetary Policy Tools
 Financial Crises
1.5 Weeks
Chapter 17 – Fiscal Policy
 The Budget Process
 Fiscal Policy Intervention
 The Crowding Out Effect
 The Fiscal Policy Debate
1 Week
Chapter 18 – Trade Policy
 Competitive Edge and Costs of Production
 Exchange Rates and Manipulation
 Quotas and Tariffs
 Trade Policy Issues
 Globalization, International Economic Policy and Sustainability
1 Week
Chapter 19 – Conclusion
 The Ricardo-Malthus Debate
 John Maynard Keynes
 Testing the Model and the Problem of Testing
.5 Week
Course Timeline (Sample)
*The following dates are approximations and are subject to change. This timeline serves
as a guide for reading the text.
MICROECONOMICS
2/3-2/6
2/7-2/13
2/14
2/19-2/21
2/24-3/3
3/4-3/11
3/12-3/18
3/19-3/20
3/24-3/27
3/28
3/29-4/4
4/7-4/9
4/10
4/11
Chapter 1-Introduction (HWK 1)
Chapter 2-Modeling Individual Choice (HWK 2)
Test Chapters 1-2
Chapter 3 Independent Choices and Market Coordination
Chapter 4 Product Market Demand (HWK 3)
Chapter 5 Product Market Supply
Chapter 6 The Power of the Invisible Hand (HWK 4)
Test Chapters 3-6
Chapter 7 The Factor Market (HWK 5)
Chapter 8 General Competitive Equilibrium
Chapter 9 Market Power, Market Failure, and GE (HWK 6)
Chapter 10 The Microeconomy and the Government
Mid-Term Exam
End of Quarter
MACROECONOMICS
4/21-4/25
Chapter 11 Introduction to Macroeconomics (HWK 7)
4/28-5/1
Chapter 12 The Basic Macro Model (HWK 8)
5/2
Test Chapters 11-12
5/5-5/12
Chapter 13 Aggregate Demand (HWK 9)
5/13-5/15
Chapter 14 Aggregate Supply and Transition to Policy
5/16
Test Chapters 13-14
5/19-5/21
Chapter 15 Policy: The Promise and the Problems
5/22-5/30
Chapter 16 Monetary Policy (HWK 10)
6/2-6/5
Chapter 17 Fiscal Policy (HWK 11)
6/6-6/11
Chapter 18 Trade Policy (HWK 12)
6/12
Test Chapters 15-18
6/13-6/16
Chapter 19 Conclusion
6/18/14 8:00-11:00 AM
Final Exam
Supplemental Materials
THIS CURRICULUM WAS DESIGNED TO MEET THE REQUIREMENTS OF
SYRACUSE UNIVERSITY AND PROVIDE A BASIC GUIDLEINE FOR THE COURSE.
IT IS ANTICIPATED THAT THE STRUCTURE OF THE COURSE WILL CONTINUE
TO EVOLVE AND ADDITONAL MATERIALS BE USED AS THE INSTRUCTOR
MASTERS THE COURSE. IT IS SUGGESTED THAT THE FOLLOWING
MATERIALS BE INCLUDED IN THE COURSE WHERE TIME ALLOWS OR TO
ENHANCE THE COURSE AND ADDRESS COMMON CORE STANDARDS:
1. Incorporate instruction utilizing Freakononomics
a. Chapter questions attached
2. Incorporate instruction utilizing The Economic Naturalist
a. Topic guide and analysis form attached
3. Incorporate Credit Card Project
a. Version of project attached
4. Incorporate Career Salary Project
a. Version of project attached
5. Incorporate Federal Budget Project
a. Version of project attached
6. Incorporate Public Policy Project
a. Designed in collaboration with the SUPA Public Policy course. Project available
in SUPA Public Policy curriculum.
7. Parents’ Night Meeting
a. Designed to answer additional questions and concerns regarding SUPA. It is
recommended that this meeting coincide with the annual “Back to School Night”
as the structured 10-minute session cannot address specific questions or topics.
b. Sample letter for parents attached.
8. SU Visit
a. As part of the course curriculum the class visits SU to audit classes on and
attended an instructional session to in the library resources to expose students o
the research process and the materials available to them through the SUPA
program. This trip should be done in collaboration with the SUPA Public Policy
course. The trip arrangements can be made through Marissa Johnson in the
SUPA office.
Future Curriculum Work
As with ay course, continued analysis, adaptation, refinement, and evolution is
recommended. It is suggested that future supplemental materials (economic literature) be
considered and incorporated into the course as published or recommended as listed below:
1. Design instruction incorporating The World is Flat, by Thomas Freidman.
SUPA ECN 203
Whitesboro High School
The Economic Naturalist
Robert H. Frank
The following economic concepts are addressed in the book as listed below and can be assigned in
correspondence with the course material.
Page
Question/ Enigma
Topic
18
Why is milk sold in rectangular containers,
while soft drinks are sold in round ones?
Input Costs
22
Why are the fuel filler doors on the driver’s
side of some cars but on the passenger’s side
of others?
Choices/ Economic
Questions
33
Why do many bars charge patrons for water
but give them peanuts for free?
Complements
40
Why do many cleaners charge more for
women’s shirts than for men’s?
44
Why are brown eggs more expensive than
white ones?
Supply/ Input Costs
51
Why do female models earn so much more
than male models?
Labor/ Wage Discrimination
56
Why are people who repave driveways paid
only half as much in the suburbs of Dallas as
in the suburbs of Minneapolis?
Externalities
60
Why do we leave tips for some services but
not for others?
Monopolistic Competition
81
Why do airlines charge much more for
tickets purchased at the last minute, while
Broadway theaters follow the opposite
Demand
Opportunity Costs
practice?
87
Why do VCRs have so many features when
the average person doesn’t use a majority of
the features found on even the simplest
machines?
Production Costs/
Technology
123
Why are child safety seats required in cars
but not in airplanes?
Opportunity Cost
155
Why is the unemployment rate so much
higher in Germany than in the United States?
Opportunity Cost/
Entitlements/ Fiscal Policy
156
Why are automobile engines much smaller in
Europe than in the United States?
Taxes
Name _________________________________ Date ________________ Period ______
The Economic Naturalist
Everyday Economic Enigmas Analysis Sheet
Economic Enigma:
____________________________________________________
____________________________________________
1. Your response to the above enigma:
2. What economic principle(s) is/ are addressed in the above enigma?
3. What variable(s) could change your response to the enigma?
Now turn to page _______ of The Economic Naturalist to answer question #4.
4. What is Robert H. Frank’s, author of The Economic Naturalist, explanation
to the enigma?
Mr. Klein
SUPA ECN 203
Freakonomics Chapter 1
What do School Teachers and Sumo Wrestlers Have in Common?
Answer the following question by combining the information in Freakonomics, and your
personal insight and knowledge to answer the following questions.
Chapter Concepts
 Incentives matter
 Consumer behaviors and maximizing utility
 Government regulation
Questions (Adapted from Freakonomics Student’s Guide, Palmer and Carlson):
1. What examples can you think of where moral or social incentives and economic
incentives are both present? Are the different incentives complementary or competing?
For each of the cases you cite, which do you think is the stronger incentive?
2. Describe some ways in which a schoolteacher might be able to improve the scores of his
or her students on a standardized test.
3. How has a well-motivated and seemingly benign government requirement to administer
standardized tests to grade school students had unintended and malicious consequences?
Can you think of other examples of government regulations that were imposed to achieve
one goal but have had unanticipated consequences?
4. Explain what incentives, if any, a university might have to artificially improve the test
scores and grades of its athletes.
5. What do the authors of Freakonomics conclude from an analysis of the Paul Feldman’s
bagel sales data? Do these conclusions match with economists’ expectations of human
behavior?
Mr. Klein
SUPA ECN 203
Freakonomics Chapter 2
How is the Ku Klux Klan Like a Group of Real-Estate Agents?
Answer the following question by combining the information in Freakonomics, and your
personal insight and knowledge to answer the following questions.
Chapter Concepts
 Economic Value of information
 Incentives matter
 Technological change
 Competition
Questions (Adapted from Freakonomics Student’s Guide, Palmer and Carlson):
1. Explain what is meant by the term “information asymmetries” and give examples of
information asymmetries we encounter in everyday life.
2. Explain how such innovations as the Internet have affected the prevalence of information
asymmetries.
3. Explain how the choice of terms a real estate agent uses to describe a particular property
conveys additional information about the property, and hence the price a potential buyer
might be able to successfully offer the seller.
4. Explain how the information a person has can affect his/her propensity to discriminate.
As part of your explanation, distinguish between taste-based discrimination and
information-based discrimination.
Mr. Klein
SUPA ECN 203
Freakonomics Chapter 3
Why Do Drug Dealers Still Live with Their Moms?
Answer the following question by combining the information in Freakonomics, and your
personal insight and knowledge to answer the following questions.
Chapter Concepts
 Costs of Production
 Labor Markets
 Supply and Demand
 Equilibrium
 Incentives Matter
 Monopolies
Questions (Adapted from Freakonomics Student’s Guide, Palmer and Carlson):
1. What is “conventional wisdom?” What are some ways that “conventional wisdom”
comes into being?
2. Considering this chapter’s analysis of the transformation of Listerine from an antiseptic
to a cure for halitosis, what can one conclude about the effect of advertising on market
demand for a good or service?
3. How did J.T., a branch leader of a Black Disciples street gang, acquire and maintain a
regional monopoly over crack cocaine within the territorial domain of the gang?
4. What are monthly costs incurred by J.T.’s unit of the Black Disciples? Which costs
would be considered fixed costs? Which would be considered variable costs?
5. Based on the examples in this chapter, what does the invention of better and cheaper
production methods do to the price and sales of a good or service?
Mr. Klein
SUPA ECN 203
Freakonomics Chapter 4
Where Have All the Criminals Gone?
Answer the following question by combining the information in Freakonomics, and your
personal insight and knowledge to answer the following questions.
Chapter Concepts
 Supply and Demand
 Competition
Questions (Adapted from Freakonomics Student’s Guide, Palmer and Carlson):
1. List each of the explanations of the drop in the crime that occurred in the 1990s that are
evaluated by Levitt and Dubner.
2. Of the explanations you identified in the previous question, which ones do not appear to
in fact be valid? Which ones do appear to in fact be valid?
3. Did the “graying of America” help bring down the crime rate in the 1990s? Why or why
not?
4. Summarize the argument by Donahue and Levitt regarding the relationship between the
drop in crime in the 1990s and the legalization of abortion as a result of Roe v. Wade.
Your summary should focus on such factors as the characteristics of the average criminal
(e.g., average age, home life), what happened in states that legalized abortion prior to the
decision in Roe v. Wade, and the type of woman who is likely to take advantage of Roe
v. Wade.
Mr. Klein
SUPA ECN 203
Freakonomics Chapter 5
What Makes a Perfect Parent?
Answer the following question by combining the information in Freakonomics, and your
personal insight and knowledge to answer the following questions.
Chapter Concepts
 Information
 Incentives
Questions (Adapted from Freakonomics Student’s Guide, Palmer and Carlson):
1. What market forces give rise to parenting books that appeal to a parent’s fears and
inadequacies rather than books that present an objective and evenhanded articulation of
the state-of-the science of good parenting?
2. How does the information in this chapter regarding the contradictory and confusing
assemblage of information from parenting experts support the major theme of this book
(Hint: incentives matter)?
3. Based on the example of perfect parenting in this chapter, provide examples that illustrate
how the combination of asymmetric information and fear can lead to inefficient
outcomes.
4. What tool does an economist use to make sense of data that includes many variables? In
general terms, how does regression analysis sort out the data?