Download ECON 2010-400 Principles of Microeconomics

Dr. Diana Moss
phone: 303-492-5169
[email protected]
Office hours: Mondays 12:30 - 2:30 pm
University of Colorado – Department of Economics
Principles of Microeconomics (2010-400)
Fall 2003 (T-Th: 12:30 - 1:45 pm)
Course Objectives and Description:
The objective of this course is to familiarize you with the basic theory and applications of
microeconomics. Microeconomics is largely about how consumers, firms and governments make
choices. Decision-making is important because resources are scarce. So, for example, what to
consume, how much to produce, and who to produce it for are all questions that merit looking into.
We will explore a number of concepts that are central to microeconomic thinking, including:
opportunity cost, marginalism, economic efficiency, incentives, market power, and market failures.
This course will emphasize not only the fundamentals of microeconomics, but also developing the
tools that are useful for thinking critically about a wide variety of issues, particularly those that are
important for public policy.
Course Requirements, Grading and Other Policies
1.
Final exam
40%
Best two grades of the following three
(items #2, #3, and #4):
2.
3.
4.
Recitation attendance and assignments 30%
Mid-term exam #1
30%
Mid-term exam #2
30%
----------------------------------------------------------Total
100%
Exams: There are no make-up mid-term exams. There is no make-up final exam unless there is a
verifiable emergency involving you and/or your family. If you have three or more final
examinations on the same day, we will adhere to the University’s final exam policy. In such cases,
you are entitled to arrange an alternative examination time for the last exam or exams scheduled on
that day. Please see http://www.colorado.edu/policies/final_exam.html) for complete details. The
grading policy for the course is designed to suitably accommodate--in accordance with the
University’s policy--the possible conflict of exam or assignment scheduling with the observance of
religious holidays (see: http://www.colorado.edu/policies/fac_relig.html).
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Recitations: I expect you to attend scheduled recitations and turn in assignments. You will have a
total of 5 recitation assignments (problem sets) throughout the semester worth 6 points each. The
Teaching Assistants will then assign 6 additional points based on your attendance and participation
in recitations. However, I understand that unexpected circumstances can arise, so I will drop the
lowest point score earned on one of the 5 recitation assignments. Late recitation assignments will
not be accepted and will receive no credit since those who turn in late assignments have an
advantage over those that turn them in on time. An assignment is considered late if it is handed in
after the date and time when it is due.
Grading policy: The course requirements and relative weights for each component are stated in
the table above. Again, I understand that unexpected circumstances can arise, so I will drop the
lowest of the mid-term exam #1, mid-term exam #2, and recitation scores. I will then scale the
distribution of points in the class to the highest number of points earned in the class, and assign
letter grades to percentage ranges based on my judgment and expectation of what constitutes “A+,”
“A,” “A-,” “B+,” “B,“ etc. performance. Thus, a letter grade of “A” could be assigned, for
example, to point scores between 85 and 95 points, or between 93 and 96 points. This grading
policy is designed to be fair, give you some flexibility, and allow me to efficiently administer the
course. The guarantee of a dropped low mid-term or recitation score is an option that remains
valuable throughout the semester. For example, if you skip a mid-term exam and then perform
poorly on the final exam, you will have no “cushion” to fall back on at the end of the semester.
Also, if everyone does especially well on the exam you skipped, your relative score will be negatively
affected. Thus, you should work hard to complete all four components of the course requirements
listed in the table above.
Academic Integrity: Students are expected to abide by the University’s academic integrity
policy, which can be found at http://www.colorado.edu/academics/honorcode
Student Conduct: Students are expected to conduct themselves in the classroom in accordance
with the University’s policy, which can be found at:
http://www.colorado.edu/policies/classbehavior.html. In particular, the use of cellular phones or
PCS devices while the class or recitations are in session distracts the class from the subject matter or
discussion. Therefore, these devices should be turned off before the start of class or recitation.
Students with Disabilities: In accordance with University policy, if you have specific disabilities
that require accommodation, please let me know early in the semester so that your learning needs
may be appropriately met. You will be required to provide documentation of your disability to the
Disability Services Office in Willard 322 (telephone: 303-492-8671). For details, please see:
http://www.colorado.edu/disabilityservices.
Text
The assigned textbook: Microeconomics Principles and Tools, 3rd edition, by O’Sullivan and
Sheffrin is available at the bookstore. This course covers a large amount of material and the CD is
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very useful is reinforcing your comprehension of concepts and applications. I encourage you to
keep up with the readings, in advance of their coverage in lecture. The speed at which I cover
material may vary.
Calendar of Topics, Assignments, and Exams
The topics I will be covering in the course are listed below. I will try hard to adhere to the schedule,
but may deviate somewhat if necessary.
Week(s)
Topic and Reading Assignment
Weeks 1 - 5
Introduction (chapter 1): scarcity and production possibilities, positive and
normative economics, microeconomic applications and relation to public
policy.
Key Principles and Economic Systems (chapters 2-3): opportunity cost,
marginalism, diminishing marginal returns, market failures; why markets exist
and how they operate, non-market based economic systems, preview of
government involvement in markets.
Supply, Demand, and Market Equilibrium (chapter 4): law of demand,
individual and market demand; law of supply, individual and market supply;
market equilibrium; changes in demand or supply versus changes in quantity
demanded or supplied; effects of changes in demand and supply.
Elasticity (chapter 5): price elasticity of demand--determinants of elasticity,
computing and using elasticity, relationship between total revenue and
elasticity and its implications; cross-price elasticity of demand; price elasticity
of supply--determinants of elasticity, computing and using elasticity.
Market Efficiency and Government Intervention (chapter 6): consumer
and producer surplus, economic efficiency, government price/quantity
controls and their efficiency implications, spillover effects and efficiency.
Consumer Choice (chapter 7): marginalism and individual demand; utility,
indifference curves and budget constraints, utility maximization.
SEPTEMBER 30:
MID-TERM EXAM: REGULAR CLASS TIME
Weeks 6-10:
Production and Cost (chapter 8): economics versus accounting cost,
short-run versus long-run, production and costs in the short run, the
importance of marginal versus average cost, production and costs in the
long-run, long-run average cost and minimum efficient scale, returns to scale.
Perfect Competition (chapter 9): conditions for perfect competition,
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demand facing the individual competitor versus market demand, profitmaximization, short-run output decisions and shut-down, long-run supply
and market equilibrium, firm entry, increasing-, decreasing-, and
constant–cost industries.
Monopoly (chapter 10): demand facing a monopolist, reasons for
monopoly, monopoly output decisions, profit-maximization, efficiency
implications of monopoly, natural monopoly and regulation.
Entry and Monopolistic Competition (chapter 11): entry and effect on
the market, product differentiation.
Oligopoly and Strategic Behavior (chapter 12): conditions for oligopoly,
market concentration, coordination among firms, cartels, price fixing, games
and strategic behavior, price leadership, legal implications of coordination.
Market Power (chapters 13-14): market power–defining, acquiring and
exercising it, price discrimination, antitrust and regulation.
NOVEMBER 6:
MID-TERM EXAM: REGULAR CLASS TIME
Weeks 11-15:
Imperfect Information and Disappearing Markets (chapter 15):
asymmetric information, thin or missing markets, moral hazard problems.
Public Goods, Taxes, and Public Choice (chapter 16): public versus
private goods, free-rider problems and public goods, financing government-effects of taxes and tax burden, efficiency implications of taxation.
Environmental Policy (chapter 17): spillover costs, output versus pollution
taxes, regulating emissions, command and control versus market-based
systems, approaches to global warming.
Labor (chapter 18): labor demand in the short- and long-run, labor supply,
wage and income differences, labor unions.
International Trade and Public Policy (chapter 20): specialization and
gains from trade, protectionist trade policies, recent trade agreements.
DECEMBER 13:
FINAL EXAM: 7:30 AM - 10:00 AM (location to be announced)
See: http://registrar.colorado.edu/Calendar/Fall03Eexam.htm
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