Download ECON 1000-100 Introduction to Economics

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General Economics, Econ 1000-100, Fall 2004.
Instructor: Prof. Kishore G. Kulkarni, Ph.D., 3 Teaching Assistants
Office Location: Room 10, (Basement) Economics Building,
Phone Number: 303-556-2675 feel free to leave a message. Students can
also send an e-mail at [email protected] Fax 303-556-3966.
Office Hours: Tuesday and Thursday: 3.15 PM to 4.30 PM, and by
appointments.
Textbooks: 1) “ Principles of Macro-Monetary Theory”, Kishore Kulkarni,
4th Edition, Kendall/Hunt Publishing Company, Dubuque, Iowa, 2003. 2)
General Economics, Robin Bade/Michael Parkin, Pearson Custom
Publishers, First Edition, 2004.
Course Description and Objective: This class focuses on the overall working
of market system in capitalistic economy, money supply measurements,
banks’ functioning and regulation in US, fiscal and monetary policy effects,
elasticity, consumer choice theory and different forms of markets. There is
also discussion of some institutions such as Federal Reserve System and
examples of firms’ behavior in different markets. The main objective is to
get you started on understanding of economic way of thinking.
This is a demanding class and requires special attention to do well in it.
Attendance in all classes is mandatory, and several absences with out a
convincing reason will earn an F grade for the course. Each class provides
plenty of information and the notes.
There are 4 tests to be taken all of them are of 40 multiple choice questions.
Recitation class performance is valued for 20 % of the class grade. You
should attend all of the recitation classes, and perform well in their tests.
Final grade depends upon absolute performances in these tests. In general, a
90% score guarantees an A grade, 80% a B and 70% a C grade. Scores of
60% and less get F grade. Make up exams are discouraged and only in case
of an emergency make up exam is scheduled usually in the last week of the
classes.
LIST OF TOPICS TO BE COVERED IN ECON 1000
Topic 1: A few definitions: Micro-Macro, Factors of Production, Economic System,
Opportunity costs, Circular flow, PPC, Economic Hypothesis and Economic Models.
Topic 2: Law of Demand: Statement, reasons for its validity, ceteris paribus assumption,
change in demand Vs change in quantity demanded. Market demand curve. Law of
Supply: Statement, reasons for its validity, ceteris paribus assumption, change in supply
Vs change in quantity supplied.
Topic 3: Market mechanism, paradox of flexibility, shortages and surpluses, "outside
shocks" to market mechanism. Activities of arbitragers, speculators and middlemen,
government's price control policy.
Topic 4: Money and Banking in the US, definition, evolution and functions of money.
Types of US money supplies and the working of commercial banks in US. The simplified
model of money creation, simplified money multiplier and assumptions of the model.
Topic 5: Control of Banks in US, history of Federal Reserve System, its functions and
different layers of authority. Three weapons to change the US money supply and
monetary policy making in US.
Topic 6: Monetary Theory: Quantity theory of money and its conclusion and criticisms,
Keynesian monetary theory and pegging the interest rate policy. Monetarists' counterrevolution, who is right? Neo-Keynesians Vs Monetarists debate of 1970s and 1980s.
Topic 7: Elasticity: What is that? Demand elasticity, types of elasticities, demand
elasticity and total revenue of the firm.
Topic 8: Consumer choice theory: Case of one good, two or more goods and the law of
diminishing marginal utility, consumer surplus and producer surplus.
Topic 9: Theory of Production and Costs: total cost, total fixed cost, Total variable cost,
marginal cost, average cost. Total revenue, marginal revenue, Average revenue. The law
of variable proportions and profit maximization approaches.
Topic 10: Theory of Perfect Competition, characteristics of the market, profit
maximization of the firm under short -run and long-run. Utopia of long-run profit
maximization under perfectly competitive market.
Topic 11: Theory of Monopoly Power: AR curve under monopoly, short run profit
maximization and the price discrimination under monopoly.
Topic 12: Theory of Market Failure: Public Goods, Monopoly Power, Externalities,
Social Costs and Social Benefits.